Dollar weakness expected for EUR/USD, GBP/USD and USD/CAD
Dollar weakness on the cards, as potential EUR/USD and GBP/USD strength is coupled with expected USD/CAD weakness.
EUR/USD falls into Fibonacci support
EUR/USD has been on the slide over the course of the week, coming off the back of a sharp rally on Friday.
That break higher points towards a potential period of upside to come for the pair, raising the possibility of a bullish reversal from the 76.4% Fibonacci support level which has been respected overnight. A break below the $1.1051 low would bring the wider bearish picture back into play. However, it is worthwhile watching for a potential resurgence from here, with Fibonacci support expected to play a key role in such a recovery.
GBP/USD showing signs of weakness, yet trend still remains for now
GBP/USD saw sharp losses yesterday after UK Prime Minister Boris Johnson limited the time a coalition would have to legislate against a no-deal Brexit.
The growing threat of a disorderly exit from the EU puts pressure on the pound, yet we will also need to keep an eye out for the US gross domestic product (GDP) figure today which is particularly notable given recent fears over a potential impending recession. The four-hour chart highlights the respect of 76.4% Fibonacci support within yesterdays sell-off, with a break below that $1.2156 level needed to bring about greater confidence of a wider pullback. However, we will ultimately need to see a break below $1.2108 to signal a return to the wider bearish trend. To the upside, the price has to break through the $1.231 peak to signal the end of this recent pullback.
USD/CAD reverses lower after Fibonacci retracement
USD/CAD has managed to rally back into the 76.4% Fibonacci retracement following a breakdown below $1.3251 on Monday. That prior breakdown points towards this rally being a retracement and thus the 76.4% Fibonacci level looked a good selling opportunity.
With the price breaking lower, this still looks compelling for shorts, where a break below $1.3287 would bring a new sell signal. Conversely, we would need to see a break through $1.334 to bring about a more bullish picture.
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