EUR/USD selloff likely to continue following shooting stars seen overnight
EUR/USD resurgence over the US and Asian sessions have moved us into a position where the past two candles have formed shooting stars – small bodies with long upper shadows. This typically comes when the market is unable to retain any gains and points towards likely losses to come. As such, I believe we are likely to see selling continue apace with a move back to $1.0846 this morning. The next support in view past that level would be $1.0819.
GBP/USD resurgence important, yet BoE makes trading risky
Cable has managed to get back into the ascending triangle formation, which points to inherent sterling strength; something we have seen a lot of in recent weeks. However, the important thing now is regaining the $1.565 level to create a new high. The key resistance zone here is between $1.567 and $1.5689, which if broken would lead to a bullish outlook. However, with the Bank of England releasing a whole raft of economic data and its rate decision today, I am steering clear given the unpredictability of those events and how the market will take them.
If I was to say anything for price action prior to the BoE event, I would say that the likely resurgence of the US dollar, coupled with a likely breather for sterling would push me more towards a retracement in the short term.
USD/CAD upside remains in favour despite temporary pullback
USD/CAD pulled back to near enough the C$1.3103, which provided a great entry for those lucky enough to get it. However, just as discussed on yesterday’s IGTV broadcast, the ability to remain above $1.3103 was key and the fact that the pullback didn’t actually fully touch this level was telling. I continue to see any retracement as an opportunity to get long and as such, I continue to see further upside in USD/CAD.
Do not forget the relationship with crude prices is key, so those trading the CAD should also be aware of oil charts given their influence. For now, I expect a break above C$1.321 to bring another leg higher towards C$1.33.