[DanRath]

While the daily chart shows the USD catching one of the firmest bids off the intraday lows that we have seen in quite some time, it remains to be seen where we close out the session. There is firm resistance against deeper USD rebounds in the upper 1.08 through low 1.09 zone and we expect the USD recovery to stall shortly. A daily close well off the intraday lows will hold out the prospect of a deeper rebound/stabilization in the underlying downtrend but we see little to suspect at the moment that the downtrend is poised to reverse in a significant or durable manner. Rather, there is still more downside in this market and note that short, medium and longer term oscillator studies measuring the strength of the underlying trend continue to point towards a weaker USD. Continue to target 1.0465 as the 1.30 double top measured move objective; intraday weakness below 1.0815/20 should see the downside move resume.

[DanRath]

USD/CAD – Late yesterday, it was looking like the USD had a shot at a rebound and the overnight gains towards 1.10 supported that scenario – until the USD lost traction and was dumped back under 1.09. Yesterday’s promising technical signal (a “hammer” low) is being swamped by renewed USD selling today and the picture on the daily charts continues to tell the story of a USD that attracts sellers on any
sort of bounce. Short term (1-hour and 6-hour) charts this morning look quite negative for the USD, with the market selling off strongly from the overnight highs and struggling to sustain rebounds through the upper 1.08s in our session. An important short term high at 1.0974 was reached overnight and this serves as key short term resistance now. The loss of support at 1.0885/90 this morning points to the risk of another sharp leg lower in the USD in the next few days. Look to sell rallies and target a move to 1.0465.