Weekly recap – Chart of the day by ForexAnalytix

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USDCAD trying to build a reversal higher

The USDCAD has been in a very long downtrend trend since the Covid-19 lockdown early 2020. Since fall of 2020 the USDCAD has been in a descending wedge which is (by definition) a reversal pattern for a bounce eventually. Today, the USDCAD had a bullish outside day reversal candle off the long term post Covid-19 spike higher at 1.2474. A move above the 1.2700 level would suggest that we are going to recover back to the 1.3000 level in the coming weeks.

AUDNZD forging lower highs

The rejection of the 1.0800 level this week leaves the possibility for a move back towards the 1.0600 level now that we are trading back below the 200dma. If the dip can hold near the 1.0600 level in the coming sessions and longer term triangle consolidation may be forming.

EURGBP at key support

The Sterling has been on a rip higher the last few weeks and the EURGBP has slumped to levels not seen since early 2020 as a result. However, we are at a 5+yr trend line today as we are at the .8600 level. Even though in the last several weeks I have been very bullish the GBP overall (on different crosses) the risk of a bounce in the EURGBP may be high as the RSI is at levels not seen since 2017 and very oversold. In addition, the US equity markets may be ready to consolidate gains or pullback some, which the GBP tends to underperform in that environment. Bears in the EURGBP should be careful near term. I do expect this .8600 level to eventually give way, but near term may be another story.

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