Daily Market Report – USD/CAD Eyeing More Crucial Break August 09, 2017

USD/CAD Break Or Bounce?

The price registered little gains today as the USDX failed to resume the minor rebound. USD/CAD needs a bullish spark to be able to climb towards new highs. Technically the rate was somehow expected to increase further in the upcoming days, but the USDX has found temporary resistance right below the 93.81 static support, failing to reach the 94.00 psychological level.

USDX is still trapped below a strong dynamic resistance, will take out this obstacle only if the United States data will impress today.

The fundamental events will bring life on the USD/CAD later, the Canadian Building Permits could drop by 1.8% in June versus an 8.9% growth in May, while the Housing Starts are expected to decrease from 213K to 204K.

The US Prelim Nonfarm Productivity and the Prelim Unit Labor Costs could increase by 0.7%, respectively by 1.1% level. The Final Wholesale Inventories will be released as well and are expected to increase by 0.6%.

The US Crude Oil Inventories will be published and could help the Loonie if will drop much more than expected.

It is pressuring the 1.2678 static resistance and only a valid breakout will confirm a further increase on the short term. Was somehow expected to resume the bullish movement after the breakout above the median line (ml) of the minor descending pitchfork, has retested this level and now could climb higher. I want to remind you that a disappointment coming from the US will send the rate towards the near term support from the fourth warning line (wl4).

You should know that the next major upside target will be at the median line (ML) of the major descending pitchfork, we have some important confluence area that could attract the rate higher. The minor rebound was natural after the failure to reach the lower median line (lml) and the LML.

USD/JPY Breakdown Favored

USD/JPY continues to move within a symmetrical triangle, but a breakdown is favored as the Nikkei stock index plunged aggressively today. JP225 reached the 19700 major static support and looks too heavy to be stopped, a valid breakdown below this level will signal that the Yen will dominate the currency market in the upcoming weeks.

Price approaches the downside line of the symmetrical triangle and the 50% retracement level, a breakdown will send the rate much below the first warning line (wl1).

USD/CHF Registered An Unbelievable Drop

Price plunged after the failure to reach the confluence area formed between the second warning line (wl2) of the minor ascending pitchfork with the third warning line (WL3) of the major ascending pitchfork. Was almost to reach the upper median line (uml) today, could still reach the confluence between the upper median line (uml) with the WL3, where he may find support again.

By Olimpiu Tuns

Market Analyst

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