Daily Market Report – USD/CAD Focused On Correction August 21, 2017

USD/CAD Targeting New Lows

USD/CAD opened with a gap down in the morning and looks determined to take out another support level. Is trading in the green right now even if the USDX is going down aggressively after another failure to take out the 93.81 static resistance.

USDX is approaching the 93.00 psychological level and the 92.94 previous low, will drop towards the 92.55 swing low if will close below these levels. We may still have a sideways movement above the 92.49 static resistance before will start another significant move.

USD/CAD is pressuring a dynamic support, a breakdown will open the door for more declines on the short term.

The Loonie lost some ground versus the USD in the last two hours as the Canadian Wholesale Sales dropped by 0.5%, even if the economists have forecasted a 0.6% growth. It is pressuring the fourth warning line (wl4) of the former minor ascending pitchfork. We’ll see what will happen because has retested the median line (ml), but a breakdown below the wl4 will send the rate towards the 1.2460 major static support.

Only a rejection from here will signal a bullish movement which could ignore the upper median line (uml) of the minor descending pitchfork and the median line (ML) of the major descending pitchfork.

You can see that I’ve drawn a major black ascending pitchfork, the rate could come even to retest the lower median line before will climb much above the1.2777 previous high.

EUR/USD Turned To The Upside

The EUR/USD is trading in the green and resumes the Friday’s bullish candle. The upside momentum is natural as the USDX is trading in the red and looks too heavy to be stopped at this moment. It is trading near the 1.1820 level and could hit fresh new high till the end of the day. The next upside target is at the 1.1846 previous high, could be attracted by the upper median line (uml) as well. Will resume the upward swing if will have enough energy to close above the 1.1909 previous high.

EUR/GBP Strongly Bullish

Price goes higher and is targeting new high as the EUR is very strong on the short term. The European currency increased versus all its rivals in the last hours despite the lack of high impact data. Price is attracted by the upper median line (UML) of the major ascending pitchfork and by the 0.9226 static support. A valid breakdown will signal a further increase on the medium term.

By Olimpiu Tuns

Market Analyst

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