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The Canadian Dollar weakened against the Greenback in the wake of softer monthly economic reports on Friday. The USD/CAD rose by 24 base points or 0.20% to keep growing up to the highest level in four weeks of 1.2511, but continued the session below the 1.2500 mark.

The reports showed that the Canadian Gross Domestic Product was flat in the month of July. However, the country's economy marked the strong growth for eight months in succession, which prompted the Bank of Canada to hike key interest rates two times during the last three months. However, the Bank's Governor Stephen Poloz dovish comments provided and moderation in the economic growth momentum raise concerns over another rate hike in 2017.

The British Pound fell significantly against the US Dollar on Friday morning, following the couple of the UK economic reports. The Sterling decreased against its American counterpart by 47 base points or 0.35% to the 1.3373 mark to fully deprive Thursday's gains.

Official projections for Britain's current account deficit showed that the gap between the entire UK income and spending widened significantly, which now is expected to reach 5.9% of GDP in the June quarter. Other figures revealed that that the UK economy expananded just 1.5% year-over-year in the Q2, the slowest growth pace since 2013. Weak service sector and growth figures sent the Pound down, appearing to cast doubts whether the BoE would raise key interest rates this year.

On the GBPUSD we see strong rising price action since August of 23. We see a potential impulse in the making, that can extend its gains towards the 1.3722 region in coming days or weeks. However, current slow and choppy price activity can be corrective wave 4 in the making, that can search for its support near the Fibonacci ratio of 38.2 and near the former swing high of wave three and there make a new bounce higher.

GBPUSD, 4H

Daily Pivots: (S1) 0.7812; (P) 0.7834; (R1) 0.7852; More...

As noted before, considering bearish divergence condition in daily MACD, firm break of 0.7807 support will indicate near term reversal. Outlook will then be turned bearish for 55 week EMA (now at 0.7674) first. Meanwhile, rebound from 0.7807 will retain bullishness. Above 0.7907 minor resistance will turn bias back to the upside for retesting 0.8124 high.

In the bigger picture, rise from 0.6826 medium term bottom is seen as corrective pattern. In case of further rally, strong resistance should be seen at 38.2% retracement of 1.1079 to 0.6826 at 0.8451 to limit upside. Meanwhile, firm break of 0.7807 is the first signal that such correction is focused. Break of 0.7328 will bring retest of 0.6826 low.

Fresh acceleration higher on Monday cracked 113.00 barrier and showing scope for retest of last week's peaks at 113.20/25 and further upside.

Overall firm bullish structure remains intact after corrective dips were contained by daily Tenkan-sen/rising 10SMA.

Renewed attempts higher need close above 112.99 (50% retracement of 118.66/107.31 descend) for bullish signal, as sustained break above 113.20/25 would spark fresh bullish acceleration towards 114.00 barrier and possible extension higher.

Near-term action remains strongly underpinned by 10/200 SMA Golden-cross, with stops below 200SMA (112.00).

Res: 113.25, 113.57, 114.00, 114.49
Sup: 112.78, 112.44, 112.29, 112.29

Daily Pivots: (S1) 1.2410; (P) 1.2471; (R1) 1.2525; More....

Intraday bias in USD/CAD remains on the upside as the rebound from 1.2061 is still in progress. Current development argues that the pair has successfully defended 1.2048 fibonacci level. Further rise should be seen to 1.2777 resistance first. Decisive break there will target 38.2% retracement of 1.4689 to 1.2061 at 1.3065 next. However, break of 1.2326 will dampen this bullish view and turn bias back to the downside for 1.2061 instead.

In the bigger picture, current development argues that USD/CAD has defended 50% retracement of 0.9406 (2011 low) to 1.4869 (2016 high) at 1.2048. And with 1.2048 intact, we'd favor the case that fall from 1.4689 is a correction. Break of 1.2777 will further affirm this bullish case. That is, larger up trend from 0.9406 is not completed. However, on the other hand, firm break of 1.2048 will indicate that fall from 1.4689 is at least a medium term down trend and should target 61.8% retracement at 1.1424 and below.

Cable stood at the back foot in Asia, with upside being capped by thick 4-hr cloud at 1.3400 and accelerated through strong supports at 1.3350/42 (rising 20SMA / Fibo 61.8% of 1.3148/1.3655 upleg / 28 Sep former correction low) in early European trading.

Near-term bears are pressuring next pivot at 1.3318 (Fibo 38.2% of 1.2773/1.3655 rally) break of which would further weaken near-term structure for stronger correction of 1.2773/1.3655 and risk extension towards former top of 03 Aug at 1.3268 and daily Kijun-sen at 1.3253.

Thick 4-hr cloud (1.3400/1.3525) continues to heavily weigh on near term action and should cap corrective upticks.

UK Manufacturing PMI data for September are due today (56.4 f/c vs 56.9 in Aug) and will be closely watched for fresh signals.

Res: 1.3374, 1.3400, 1.3455, 1.3488
Sup: 1.3318, 1.3268, 1.3253, 1.3195

The Euro is holding in red in early Monday's trading, weighed by rising tensions over independence vote in Catalonia. The pair dipped in Asia from session high at 1.1814, retuning into daily cloud (cloud top lies at 1.1789) which so far contained recent attempts lower. Fresh weakness in late Asia/early Europe is shifting near-term focus towards cracked key supports at 1.1720/10 zone (Fibo 38.2% of 1.1118/1.2092 rally/27 Sep correction low/weekly 200SMA). Bearishly aligned daily techs favor retest of 1.1720/10 pivots, firm break of which would trigger bearish extension towards 1.1594/71 (daily cloud base/100 SMA). Last week's close in red and below the neckline of H&S pattern, formed on daily chart, weighs on near-term action, signaling deeper correction of 2017 1.0340/1.2092 rally. Broken 55SMA which capped recovery attempts last week offers initial resistance at 1.1822, which should ideally cap today's action. Plethora of barriers that lies above, consisting of 10SMA (1.1850) and converging 30/20SMA's (1.1893/1.1900) should keep the upside protected and maintain bearish pressure. EU Manufacturing PMI for September (58.2 f/c, unchanged from Aug) and Unemployment rate (Aug f/c 9.0% vs 9.1 in July) are in focus of European session.

Res: 1.1789, 1.1822, 1.1850, 1.1875
Sup: 1.1720, 1.1662, 1.1594, 1.1571

Daily Pivots: (S1) 1.1779; (P) 1.1806 (R1) 1.1839; More...

EUR/USD drops sharply today but stays above 1.1716 minor resistance. Intraday bias remains neutral first. Outlook is unchanged that decline from 1.2091 is correcting whole rise from 1.0569. Deeper fall is expected as long as 1.22029 resistance holds. Below 1.1716 will target 38.2% retracement of 1.0569 to 1.2091 at 1.1510, where we're expecting support to bring rebound.

In the bigger picture, rise from medium term bottom at 1.0339 is not finished yet. It's expected to continue after pull back from 1.2091 completes. And, next target will be 38.2% retracement of 1.6039 (2008 high) to 1.0339 (2017 low) at 1.2516. However, it should be noted that there is no confirmation of trend reversal yet. That is, such rebound from 1.0399 could be a correction. And the long term fall from 1.6039 (2008 high) could resume. Hence, we'd be cautious on strong resistance from 1.2516 to limit upside.

Daily Pivots: (S1) 1.3347; (P) 1.3395; (R1) 1.3441; More....

GBP/USD's decline from 1.3651 extends lower today and breaches 38.2% retracement of 1.2773 to 1.3651 at 1.3316. Intraday bias is now on the downside. With current downside acceleration, deeper fall could be seen to 61.8% retracement at 1.3108 next. On the upside, break of 1.3454 minor resistance is needed to signal completion of the decline. Otherwise, near term outlook remains mildly bearish in case of recovery.

In the bigger picture, current development argues that the long term trend in GBP/USD has reversed. That is, a key bottom was formed back in 1.1946 on bullish convergence condition in monthly MACD. Current rise from 1.1946 will target 38.2% retracement of 2.1161 (2007 high) to 1.1946 (2016 low) at 1.5466 next. In any case, medium term outlook will now stay bullish as long as 1.2773 support holds.