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Dollar starts to fade, bringing EUR/USD and GBP/USD upside, while USD/CAD weakens

Dollar strength starts to fade, bringing the chance for EUR/USD and GBP/USD resurgence, while USD/CAD turns lower.

Transcript

EUR/USD heading higher after recent pullback

EUR/USD has seen a pullback this week, with the pair seemingly retracing within an ongoing uptrend.

With that in mind, the respect of 61.8% support and subsequent rise through $1.2106 signals the potential end to this retracement. As such, bullish positions are favoured, with a break below $1.1986 required to negate that bullish outlook.

GBP/USD falls into $1.40 handle

GBP/USD has also seen some weakness in recent days, with the price falling back into the $1.40 handle for the first time since Monday's gap through this level.

The wider uptrend does highlight the strong chance that this period of weakness ultimately resolves in another move higher. However, whether we are going to end that pullback at this $1.40 handle, or retrace into the deeper Fibonacci levels remains to be seen. In either case, a bullish view holds unless the price breaks below $1.3801.

USD/CAD expected to turn lower before long

USD/CAD has also seen some dollar strength of late, with the pair pushing into the 50% Fibonacci level yesterday. The wider bearish trend highlights the strong chance that we will ultimately resolve towards the downside.

With the stochastic crossing back out of oversold territory, and the moving average convergence/divergence (MACD) histogram rolling over, it seems momentum is pointing towards that bearish move taking shape from here. In any case, a bearish outlook holds unless the price breaks through the C$1.2351 swing-high.


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