By: Christopher Lewis
EUR/USD
The EUR/USD pair fell for much of the previous week, but managed a bounce to form a hammer. However, there is also a descending trend line on the daily chart that looks like a potential descending triangle trying to form. With this in mind, this pair will continue to lack clarity unless we get a solid daily close above it. At that point, 13.5 is probably the next target. If not, this pair will grind back down to the 1.31 level. Expect choppiness in this market.
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USD/CAD
The USD/CAD pair had a very bearish week over the last five sessions to sit at the 0.98 level in the end. The level is the bottom of the support zone that has kept this market in consolidation over the last few months, and has to be broken down through in order to sell at this point. Monday should be important, but overall I am expecting to see the 0.98 level give way. If it doesn’t break down through the area, selling rallies should continue to work. Parity is without a doubt a great place to sell rallies from as well.
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USD/JPY
The USD/JPY pair is rapidly approaching the all-important 80 level. This area will decide the direction for this pair for the next several months in my opinion. The 50% Fibonacci level is just above it, and the 200 day EMA is just below it. With all of this being said, I am buying signs of support around the 80 handle. A break lower could get the Bank of Japan involved so selling isn’t a thought at this point.
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AUD/USD
The Aussie has bounced quite nicely form the 50% Fibonacci retracement level, and it looks as if the uptrend is going to remain intact. With this in mind, it is almost impossible to sell this pair now. In fact, a break of the highs from last week would be a classic buy signal in this pair. With the markets thinking easy money is here for much longer, it only makes sense that the gold markets will rise, and by extension the AUD/USD pair.
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However, it should be noted that the Reserve Bank of Australia is expected to cut rates on Monday, so buying off of that dip could also be a feasible trade as well as the market has already prices in a 0.25% rate cut. As long as the rate cut comes in at that rate, or they don’t cut at all, we should see this pair rise overall.