Best of the Week
Most Popular
1. Climate Change Mass Extinction - Birds, Bees and Bugs: Going Going Gone - Richard_Mills
2.A Purrrfect Gold Price Setup! - Peter_Degraaf
3.Who Finances America's Borrowing? Recession Indicator for Independent Thinkers Part 2 - F_F_Wiley
4.America’s One-sided Domestic Financial War - Raymond_Matison
5.Gold Price Summer Doldrums - Zeal_LLC
6.Two Key Events Will Unleash Gold - Jim_Willie_CB
7.Billionaire Schools Teacher in NAFTA Trade Talks - Richard_Mills
8.Get Out Of Crypto Cannabis Bubble Before It Pops and Move Into Bargain Basement Miners - Jeb_Handwerger
9.Stock Market Could Pullback for 1-2 weeks, But Medium Term Bullish - Troy_Bombardia
10.G7 Chaos, Central Banks and US Fed Will Drive Stock Prices This Week - Chris_Vermeulen
Last 7 days
How Crazy It Is to Short Gold with RSI Close to 30 - 16th Jul 18
Markets Pay Attention Moment - China’s Bubble Economy Ripe for Bursting - 16th Jul 18
Stock Market Uptrend Continues, But... - 16th Jul 18
Emerging Markets Could Be Starting A Relief Rally - 16th Jul 18
(Only) a Near-term Stock Market Top? - 16th Jul 18
Trump Fee-Fi-Foe-Fum Declares European Union America's Enemy! - 16th Jul 18
US Stocks Set For Further Advances As Q2 Earnings Start - 15th Jul 18
Stock Market vs. Gold, Long-term Treasury Yields, 10yr-2yr Yield Curve 3 Amigo's Update - 15th Jul 18
China vs the US - The Road to War - 14th Jul 18
Uncle Sam’s Debt-Money System Is Immoral, Tantamount to Theft - 14th Jul 18
Staying in a Caravan - UK Summer Holidays 2018 - Cayton Bay Hoseasons Holiday Park - 14th Jul 18
Gold Stocks Summer Lows - 14th Jul 18
Trump US Trade War With China, Europe Consequences, Implications and Forecasts - 13th Jul 18
Gold Standard Requirements & Currency Crisis - 13th Jul 18
Focus on the Greenback, Will USD Fall Below Euro 1.6? - 13th Jul 18
Stock Market Outlook 2018 - Bullish or Bearish - 13th Jul 18
Rising Inflation is Not Bearish for Stocks - 13th Jul 18
Bitcoin Picture Less Than Pretty - 13th Jul 18
How International Observers Undervalue the Chinese Bond Market - 13th Jul 18
Stocks Trying to Break Higher Again, Will They? - 12th Jul 18
The Rise and Fall of Global Trade – Redux - 12th Jul 18
Corporate Earnings Q2 2018 Will Probably be Strong. What This Means for Stocks - 12th Jul 18
Is the Relative Strength in Gold Miners to Gold Price Significant? - 12th Jul 18
Live Cattle Commodity Trading Analysis - 12th Jul 18
Gold’s & Silver’s Reversals’ Reversal - 12th Jul 18
The Value of Bitcoin - 11th Jul 18
America a Nation Built on Lies - 11th Jul 18
China, Asia and Emerging Markets Could Result In Chaos - 11th Jul 18
Bullish Gold Markets in the Big Picture? - 11th Jul 18
A Public Bank for Los Angeles? City Council Puts It to the Voters - 11th Jul 18
Yield Curve Inversion a Remarkably Accurate Warning Indicator For Economic & Market Peril - 11th Jul 18
Argentina Should Scrap the Peso and Dollarize - 11th Jul 18
Can the Stock Market Close Higher For a Record 10th Year in a Row? - 11th Jul 18
Why Life Insurance Is A Must In Financial Planning - 9th Jul 18
Crude Oil Possibly Setting Up For A Big Downside Move - 9th Jul 18
BREAKING: New Tech Just Unlocked A Trillion Barrels Of Oil - 9th Jul 18
How Trade Wars Penalize Asian Currencies - 9th Jul 18
Another Stock Market Drop Next Week? - 9th Jul 18
Are the Stock Market Bulls Starting to Run? - 9th Jul 18

Market Oracle FREE Newsletter

5 "Tells" that the Stock Markets Are About to Reverse

Will USD/CAD Drop Further?

Currencies / Forex Trading Jul 28, 2017 - 12:51 PM GMT

By: Nadia_Simmons

Currencies

Yesterday, the greenback extended losses against the Canadian dollar, which resulted in a drop below the May 2016 low. Does it mean that the way to lower levels is open?

EUR/USD


Yesterday, EUR/USD came back above the upper border of the green consolidation and the upper border of the brown rising trend channel, invalidating the earlier breakdown under these lines. Thanks to this move the exchange rate also climbed above the August 2015 peak and the 38.2% Fibonacci retracement (both seen on the weekly chart). Despite this improvement, currency bulls didn’t manage to hold these levels, which encouraged their opponents to act earlier today. As a result, the pair pulled back and slipped under the August 2015 peak and the 38.2% Fibonacci retracement, invalidating the earlier breakout. Although this is a negative development, it will turn into bearish if EUR/USD closes this week under these two major resistance levels. If additionally, the exchange rate invalidates the breakout above the upper border of the green consolidation and the upper border of the brown rising trend channel currency bears will receive important reasons to act. In this case, we’ll likely see an acceleration of declines and EUR/USD will drop to its first downside target around 1.1408, where the lower border of the brown rising trend channel currently is. If this support is broken, the way to lower levels will be open.

Very short-term outlook:  bearish
Short-term outlook: bearish
MT outlook: mixed
LT outlook: mixed

USD/JPY

On Friday, we wrote the following:

(...) the breakdown under the red declining support line encouraged currency bears to act. As you see on the daily chart, a decline below the 38.2% Fibonacci retracement triggered further deterioration and a drop below the next retracement. What’s next? Taking into account an invalidation of the breakout above the red line and a drop below the 50% retracement, we think that the pair will extend losses and test the nearest green support zone in the coming day(s).

From tody’s point of view, we see that the situation developed in line with the above scenario and USD/JPY slipped to our downside target. Although the green support area triggered a rebound earlier this week, the par reversed and declined sharply yesterday, erasing almost all earlier gains. In this way the pair re-tested the strength of the green support zone once again. Will it withstand the selling pressure in the coming days? The buy signals gendered by the indictors suggest that currency bulls will try to push the pair higher. Nevertheless, if we zoom out our picture and take a closer look at the weekly chart, we notice that the sell signals generated by the indicators continue to suport currency bears and further deterioration.

Therefore, if the nearest green support area is broken, we may see a drop to around 109.46, where the upper border of the next green support zone is. This zone is currently also crossed by the medium-term green support line based on the previous lows, which increased the probability that this area will stop declines for longer and trigger a significant rebound.

Very short-term outlook: mixed
Short-term outlook: mixed with bearish bias
MT outlook: mixed
LT outlook: mixed

USD/CAD

On the above charts, we see that USD/CAD dropped below the green support area and the May 2015 low, which is a negative event and suggests a test of the 112.8% Fibonacci extension and the long-term green support line (based on the September 2012, January, May, September 2013 and June 2014 lows) in the coming days. Nevertheless, taking into account the importance of this support line (it stopped currency bears five times in the past) and the current position of the daily and weekly indicators, we think that reversal an bigger move to the upside are just around the corner. Therefore if we see any reliable bullish factors on the horizon, we’ll consider opening long positions.

Very short-term outlook: mixed
Short-term outlook: mixed with bullish bias
MT outlook: mixed
LT outlook: mixed

If you enjoyed the above analysis and would like to receive free follow-ups, we encourage you to sign up for our daily newsletter – it’s free and if you don’t like it, you can unsubscribe with just 2 clicks. If you sign up today, you’ll also get 7 days of free access to our premium daily Oil Trading Alerts as well as Gold & Silver Trading Alerts. Sign up now.

Thank you.

Nadia Simmons
Forex & Oil Trading Strategist
Przemyslaw Radomski
Founder, Editor-in-chief

Sunshine Profits: Gold & Silver, Forex, Bitcoin, Crude Oil & Stocks
Stay updated: sign up for our free mailing list today

* * * * *

Disclaimer

All essays, research and information found above represent analyses and opinions of Nadia Simmons and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Nadia Simmons and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Nadia Simmons is not a Registered Securities Advisor. By reading Nadia Simmons’ reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Nadia Simmons, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.


© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules