GBP/USD turning lower
An unpredictable environment remains in play for GBP/USD which set both a new higher high and lower low on Friday.
One indicator that has proven relatively consistent in the past week was the stochastic oscillator, with price dropping heavily when the stochastic crosses and turns lower from above the overbought 80 threshold.
Similarly, when the MACD histogram crosses back below 0, we often see price sell off. We are seeing both occur currently and this points towards a likely bearish session today.
However, given the inconsistent and choppy nature of this market, it could be a riskier and more unpredictable market to trade.
Support levels to watch are $1.4458, $1.4445 and $1.4383. Resistance levels to watch are $1.4547, $1.4566 and $1.4600.
USD/JPY grinds higher
USD/JPY continues to grind higher, as it takes back some of the heavy losses we have seen in recent weeks. Ultimately this is a risk-on move as this pair often rallies when indices bounce.
However, much like the indices, I do expect to see further selling come back into play later this week. For now, the short-term uptrend is expected to remain unless we see a break and close back below ¥113.00.
The crucial near-term resistance level to watch is ¥114.25, with a break above that subsequently looking towards ¥115.26.
A closed hourly candle below ¥113.20 would look towards ¥111.66 and ¥110.99 as the next key support levels.
USD/CAD breaks below wedge
USD/CAD did drop out of the rising wedge we were watching on Friday, with an initial move down towards C$1.3816.
This morning is seeing a tentative move higher, but the key is whether we will see an hourly close above C$1.3867. Until that happens, a bearish view remains, with support levels of C$1.3816, C$1.3758 and C$1.3639 in view.
However, a closed hourly candle above C$1.3867 would provide a more neutral outlook.