Forex Investment and Currency Trading

USD/CAD – Support at 0.9940 and 0.9724 is expected to attract buying interest for a return to 1.0343. USD/CAD remains locked in a broad 0.9700-1.0400 trading range as overbought conditions caused the rejection of the top end of the range two weeks ago. A base building processis is underway, with support at 0.9940 and 0.9724 expected to attract buying interest for another test of resistance at 1.0343. Adaily close above this level would resolve the consolidative rectangle pattern to the topside, targeting 1.0468 and 1.0653 thereafter. Target remains located at 1.0335.

EUR/USD – Close above the cyclical high at 1.5905 would favour greater gains to 1.5997, followed by 1.6113. EUR/USD reached price target this week after the expected retracement moved valuations from overbought to more neutral levels. With support at 1.5657 and 1.5513 expected to attract buying interest, the focus is now on the cyclical high at 1.5905. A daily close above this level would favour additional gains to secondary resistance at 1.5997, followed by the channel top at 1.6113. The new target is located at 1.6000, with a close below 1.5513 required to reconsider the bullish view.

GBP/USD – Poised for a return to resistance at 1.9971 as a bullish divergence is in place. The selloff in GBP/USD stalled ahead of support at 1.9611 following a 1-day overshoot of the double bottom at 1.9724. With the daily studies tracing out a bullish divergence from near-oversold levels, support at 1.9724 and 1.9611 is expected to attract buying interest for a test of resistance at 1.9971. A daily close above this level is required in order to affirm the bullish view, highlighting a more significant trendline at 2.0229. Although it might be a bit aggressive, 2.0100 is the next price target for GBP/USD.

USD/JPY – Close below 101.80 sets the stage for a deeper selloff to 98.60. The rally in USD/JPY has stalled ahead of resistance at 103.29 after the daily studies generated a sell signal from overbought levels. With the 103.29 level expected to attract continued selling interest, a daily close below 101.80 would produce a bearish trend reversal that would set the stage for a deeper selloff to 98.60. Additional support is located at 96.89. With target at 100.25 just attained today, the new 98.75 target is in reflection of the bearish outlook.

USD/CHF – Close below 1.0049 favours a deeper selloff to the 0.9872/0.9789 region. USD/CHF has just reached target at 0.9975 after prices posted an intra-day trend reversal below 1.0049. A daily close below this level would magnify bearish developments, favouring a deeper selloff to 0.9872,followed by 0.9789. Resistance at 1.0264 is expected to attract continued selling pressure in the current environment, with 0.9790 serving as the new price target based on the bearish view.

AUD/USD – A close above 0.9353 is required in order to sustain the current advance. AUD/USD has reached price target at 0.9250 after the bullish resolution of a triangle pattern (above 0.9151). Support at 0.9151 should now attract buying interest for a test of nearby resistance at 0.9353. Prices must register a daily close above this level in order to continue the advance, with secondary resistance located at 0.9419 and 0.9534. A new 0.9410 target for a bullish view.

NZD/USD – Valuations favour a new round of cyclical gains toward 0.8098 and 0.8210. NZD/USD has encountered support near the 0.7800 level after the daily studies traced out a bullish divergence. A close above nearby resistance at 0.7965 would generate a bullish trend reversal, setting the stage for additional gains toward 0.8098, followed by the key double top at 0.8210. Support at 0.7921 and  0.7764 is expected to attract buying interest in the current environment. The price target remains located at 0.8175 based on the bullish view.

USD/MXN – Resistance between 10.6420 and 10.6790 is expected to contain pending retracements for a move to10.4760. USD/MXN is struggling to move lower after the daily studies formed a bullish divergence from oversold levels. Although this development increases the probability of a price retracement, valuation-driven rallies to resistance at 10.6420 and 10.6790 will attract new selling pressure for a move to the channel base at 10.4760. A daily close below this level would then target 10.4340. 10.5075 new price target  is in light of the bearish stance.

DXY – Set to end the current retracement phase with a close below support at 71.87. The DXY has failed to reach resistance at 73.19 despite valuations remaining in neutral territory. This is a negative sign – with a daily close below initial support at 71.87 generating a bearish trend reversal as well as the bearish resolution of a symmetrical triangle pattern. This outcome would effectively terminate the correction, favouring a deeper selloff to 71.30, followed by the cyclical low at 70.70. Secondary resistance is located at 73.95. 71.00 price target is in light of the bearish view

EUR/CAD – Break above 1.6176 would generate a new cyclical advance toward 1.6427. The pullback in EUR/CAD has fallen well-short of the target at 1.5500. With the study valuations falling from overbought to normal levels as a bearish divergence is resolved, support between 1.5831and 1.5629 is expected to attract buying interest for a test of resistance at 1.6176. A daily close above this level would favour additional gains toward 1.6321, followed by the ascending channel top at 1.6427. 1.6300 new target for EUR/CAD is based on recent price action.

GBP/CAD – Resistance at 2.0411 is now in focus after a bullish trend reversal above 2.0005 this week. GBP/CAD failed to reach the retracement price target at 1.9850 after the daily studies approached oversold levels. The resulting close above resistance at 2.0005 has produced a bullish trend reversal for the cross – with support at 2.0005 and 1.9833 now expected to attract buying interest for a move to initial resistance at 2.0279. A daily close above this level would then target the trendline at 2.0411. Revising price target to 2.0400 based on recent developments.

CAD/JPY – Overbought valuation levels causing erosion of retracement above 102.00. CAD/JPY has failed to reach retracement target at 104.00, as prices topped just above 102.00 while the daily studies reached overbought levels. Resistance at 100.84 and the descending channel top at 103.24 are now expected to attract selling interest for a test of support at 97.69. A daily close below this level would generate a bearish trend reversal, effectively ending the correction and projecting additional losses toward the cyclical low at 95.72. 96.75 is the new target.