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The common European currency edged higher during the morning hours on Tuesday. This surge was stopped near the monthly pivot point at 130.40 which introduced downside pressure considerably on the rate. As a result, the currency pair tested the 50-hour simple moving average during the Asian session on Wednesday.

The 50-hour SMA has constrained the exchange rate without any hindrance since last week. This session was not an exception, as the Euro tested the moving average today.

If the support cluster formed by the 50-hour SMA and the 23.60% Fibo holds, the currency exchange rate could target the 130.40 marks within this session.

• CAD gains ground as NAFTA deal edges closer;
• Brexit negotiations going less well, weighing on GBP;
• US GDP and pending home sales notable releases on Wednesday.

It's been a quiet start to trading on Wednesday, with equity markets in Europe slightly in the red and US futures pointing to a flat open in a few hours.

With NAFTA negotiations finally making progress, there is a sense of relief that the risk of a global trade war is easing, which has been supportive for sentiment recently. There is still a long way to go with Trump recently again threatening tariffs on cars from Europe and the US preparing another $200 billion of tariffs against China but any progress is welcome and it's hopefully something we'll see more of in the months ahead.

The Canadian dollar has gained ground in recent days on reports that it is re-joining talks and offering concessions that could result in an agreement by the end of the week. Trump had previously threatened to proceed with a US-Mexico trade agreement as a replacement for NAFTA, in effect cutting Canada out, which could have had a significant impact on the Canadian economy. While this was more than likely a bluff aimed at forcing the hand of the Canadians, it is a relief that no such move will likely be necessarily as it would have been harmful for all concerned.

Negotiations elsewhere don't appear to be progressing quite so well, with the UK and EU apparently not close to agreeing on the terms of the divorce. They had hoped to wrap everything up by mid-October in time for the EU summit, giving plenty of time for it to be ratified by all parties, but it became quite clear some time ago that this was highly unlikely. Even mid-November looks rather hopeful and the end of the year seems more likely.

The fear is that the longer negotiations go on, the more likely it is that we're headed to a no deal Brexit as both sides are clearly unable to find a solution on a number of issues – most notably the North Irish border – that satisfies everyone. The pound has suffered in recent months as the prospect of no deal Brexit becomes increasingly possible and while we have seen it gain ground in recent days, it is looking vulnerable again.

The pound is making gains against the euro today though after slipping more than 2% over the last couple of weeks. This may simply be a case of profit taking in the single currency following a good run across the board in recent weeks, rather than any underlying concern about the eurozone.

In what is otherwise a relatively quiet week for economic data, the second quarter US GDP revision today is one of the more notable releases. The number is expected to be revised slightly lower to 4% which would still represent a very strong quarter for the world's largest economy, albeit one they'll struggle to match in the quarters ahead. Pending home sales and EIA crude inventories are also notable releases today.

EUR/USD

Current level - 1.1670

Yesterday's test of 1.1750 resistance  failed and current pullback should be considered corrective, preceding another leg upwards, to 1.1840 area. Initial support lies at 1.1630.

USD/JPY

Current level - 111.17

There is still a chance for a dip to 110.70 support area before bouncing upwards, to 112.20 zone.

GBP/USD

Current level - 1.2871

Yesterday's rise was limited at 1.2930 resistance and current pullback should be the last leg of the consolidation pattern above 1.2800, before breaking towards 1.3050 area.

The Australian dollar fell to 0.7300 zone on Wednesday, pressured by decision of Australia’s Westpac Banking Corporation to increase home loan rates, extending pullback from 0.7362 (Tuesday’s high) where upside attempts were repeatedly capped by falling 30SMA.

Fresh weakness found footstep at .7300 zone (50% of 0.7237/0.7362 upleg), but near-erm risk turns lower on weaker momentum and daily MA’s returning to bearish setup.

Loss of 0.7300 handle would expose pivotal support at 0.7285 (Fibo 61.8%), break of which would confirm reversal and lower top at 0.7362 and risk return to 0.7238/40 ( 24/23 Aug lows).

Broken falling 20SMA marks solid resistance at 0.7328 and only close above here would sideline downside risk.

Res: 0.7328, 0.7353, 0.7380, 0.7453
Sup: 0.7300, 0.7285, 0.7267, 0.7238

The Canadian Dollar is trading in several ascending channels against the Japanese Yen. The most important of the pattern is the junior ascending channel which was formed on August 12 and has guided the currency pair to a three-week high a the 86.28 marks.

During the past few days, the price action has surpassed the 50-, 100-, and 200-hour SMAs and has reached the upper boundary of the junior ascending channel.

Given that the three moving averages have fallen below the price, this might suggest that the overall trend of the market is changing. Therefore, the currency exchange rate is likely to continue its movement in the ascending channel during the following trading

The Canadian Dollar has been guided by two opposite channels against the Swiss Franc. The most important of the pattern is the three weeks junior descending channel.

After hitting the upper boundary of the junior descending channel on August 7, the currency pair made a U-turn south and had since lost 157 base points or 2.04% of its values.

Given that the 50-, 100-, and 200-hour SMAs are above the price action, this might indicates that the downwards momentum is likely to continue during the following trading sessions. The next target for bears could be the lower boundary of an ascending channel pattern.

The EUR/USD has booked a new high level. Namely, the 1.1740 mark was almost reached on Tuesday. Although, the European single currency depreciated 0.26% during Wednesday's morning hours getting the rate to 1.1670 level.

During the morning hours the rate had passed the support of a monthly pivot point and the 55-hour simple moving average near the 1.1680 mark. The rate was set to face the lower trend line of an ascending pattern. It is expected that the rate might bounce off the bottom of the junior ascending channel.

Meanwhile, besides the trend line, the nearest support level was the 100-hour SMA at 1.1630, while the most adjacent resistance level was the already mentioned 55-hour SMA.

The GBP/USD broke the senior descending pattern during Tuesday's trading session. However, the resulting surge was stopped by the monthly pivot point at 1.2940, which made the rate to go back into the senior ascending channel.

On Wednesday morning the rate was at 1.2880 testing the upper line of the senior channel, but the stiff resistance levels did not allow the rate to surge upwards that fast.

The 200– hour SMA might pass the weekly pivot point at 1.2840 level, which may push the rate higher and break the channel one more time

The USD/JPY was neutral as during the whole week fluctuating at the 111.20 level. The currency pair passed the 55-hour simple moving average's resistance on Tuesday and was experiencing the 55– hour SMA support during the Wednesday's morning hours.

Moreover, the 55-hour and 100-hour SMAs crossed each other during Tuesday's trading session flashing bullish signals for traders. A new trend line is created facing sideways direction.

The USD/JPY rate change is unpredictable due to NAFTA agreement, which may influence the rate to go any direction at any time. Watch out for technical breakouts.

The gold price has decreased to the 1,200.00 mark on Wednesday morning. The price decrease occurred due to Tuesday's s price drop of 1.07% due to the US and Mexico making a trade agreement, which strengthened the US Dollar.

The 55-hour SMA passed the rate during Tuesday's session and took a role of resistance for the rate. The 100-hour SMA is playing support. The rate is located among the 55—hour and the 100-hour SMA's during Wednesday session. It is expected that the 55– hour and the 100-hour SMA's will squeeze the pathway which will force the rate to breakout upwards or downwards.

The XAU/USD is been going up for the couple of weeks now. It is expected that the price surge will continue if the fundamental news will not break the pattern.