EUR/USD, GBP/USD and USD/CAD expected to see dollar gain ground
The dollar surge has seen sharp moves on the FX market. While we are seeing that reverse somewhat, the dollar is likely to return to favour for EUR/USD, GBP/USD and USD/CAD.
EUR/USD rebound likely to falter once again
EUR/USD shorts have been working out well this week, with continued moves lower playing out alongside short-term retracements. Yesterday saw a sharp move higher, and we have seen the prices continue to gradually climb since.
The key here is that this current rally looks like a retracement despite those recent gains. Thus, a bearish resolution remains the outlook unless we see a break through the $1.1333 swing high. Given the current respect on the 61.8% Fibonacci level, there is a good chance we will soon see the market turn lower. Another short-term rise could play out, with the deeper 76.4% retracement coming in around at $1.1268. However, the bearish signal does ultimately come with a breakdown below the prior swing low (currently $1.1152).
GBP/USD stabilises after sharp sell-off
GBP/USD has seen a huge move lower this week, with the breakdown through 76.4% and $1.2726 support ultimately taking us into a new five-month low.
There is a chance of a rebound from here if we see a break through $1.2641 resistance. However, until that happens the short-term downtrend remains the primary driver.
USD/CAD pulls back from four-year high
USD/CAD has been on the rise over recent weeks, with the decline in oil prices helping drive CAD lower. This morning we are seeing that move unravel a little, with the pair moving lower once again.
This is unlikely to last, with the current pullback looking like a retracement and precursor to further upside. With that in mind, a bullish outlook remains in play, with a break below $1.3707 required to negate this outlook.
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