EUR/USD breaks lower with more selling likely
The move lower in EUR/USD yesterday saw a new low created and confirmed yesterday’s peak of 1.099 as a lower high. With that in mind, this pair is looking bearish and thus any bounce would be seen as a short-term phenomenon.
Current price action is one of consolidation and given the doji formed earlier, we could see the bears coming back in to play soon. I am bearish and expect a move back towards 1.0819 soon, where my near-term resistance levels come in around 1.088 and 1.089.
GBP/USD breaks below triangle
Mr. Lockhart’s comments pushed GBP/USD lower from the ascending triangle we have been watching over the past week. This brings a more bearish outlook given the creation of a new low below 1.555. However, the current move higher could be crucial to this change in sentiment. Should we see the price fail to move back into that pattern and respect the ascending trendline as new resistance following the previous support, this would point towards further losses. The existence of the 50- and 100-period simple moving average also adds some confidence to that region of resistance.
With this in mind, I see it likely that price will run into resistance between 1.558 and 1.56, which would subsequently provide a likely next move lower. However, given that we are in a moment where we are switching sentiment, I would need to gain clarity through bearish candles, such as a hammer or bearish engulfing pattern. Should this occur, I would be looking for a move back down to 1.5467.
USD/CAD bounces from support to continue bullish outlook
Yesterday saw the pullback in USD/CAD to 1.3103 play out perfectly, with a bounce higher coming following a doji and spinning top, where both touched the support level. The spike higher brings us to a similar situation where we could see another retracement, which would only serve to provide a better entry price for many. I would see the 1.3169 support as the first key support level to watch. Ultimately I am bullish and see any retracements as an opportunity.