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A bearish movement is dominating the CAD/JPY pair since early January. The rate reached the upper boundary of a dominant channel on January 5, and since then, it has been trading south.

Given that the rate broke the previous channel, a new junior pattern has been drawn to monitor the price movement.

As for near future, the Loonie is likely to continue trading in the channel down. The currency pair could still push further north to test the weekly R1 at 85.33 and could make a U-turn south. In addition, technical indicators flash sell signals.

Despite two attempts to breach 107.20 during the previous 24 hours, the strong resistance of the 55–, 100- and 200-hour SMAs and the monthly S1 was strong enough to limit any gains above this mark.

The bearish sentiment was strengthened early in this session when weaker US Dollar put downward pressure on the pair, thus resulting in a 75-pip decline within a couple of hours. The US Dollar is moving in a down-trend that is likely to dominate the market in this session, as well.

Technical indicators are likewise supportive of the bearish scenario. The rate is currently pushing towards the weekly S1 at 106.05, while the 2017/2018 low of 105.67 should be the daily low.

Given that no fundamentals are to be released today, the Greenback is unlikely to breach the psychological level of 107.00.

Text Similarly to other major currencies, the Pound remaine stable against the US Dollar on Friday. A fall below the 1.3960 mark was supported by the 38.20% Fibo retracement and the 100-hour SMA, while appreciation was restricted by the monthly PP at 1.40. The latter, however, was surpassed early on Monday when the pair started advancing towards the weekly R1 at 1.4054.

Technical indicators flash mixed signals, suggesting that the same period of consolidation might continue today, as well. In addition, no significant fundamentals that could pressure the rate either direction are scheduled for this session.

Given that the general trend is tended northwards, the Pound is likely to reach the weekly R1, but further advance could be limited. In terms of support, the Sterling should not fall below 1.3960.

Lack of fundamentals on Friday resulted in the Euro trading sideways against the US Dollar. Its movement was guided by the 55-hour SMA until an upside breakout occurred early in the Asian session. This strong upside momentum began when the rate reversed from the monthly PP and the bottom boundary of a four-month channel near 1.2285.

Given that the Euro also surpassed the 100-hour SMA circa 1.2320, it might still push higher within this session. A possible upside target could be either the 23.60% Fibo retracement or the 200-hour SMA at 1.2360 and 1.2375, respectively.

The testimony of the ECB President Draghi at 1400GMT could introduce some volatility in the market. In case downside risks prevail, a subsequent fall is not expected to exceed the 1.2280 mark.

The Canadian Dollar soared significantly against its American counterpart after the data showed a stronger-than-anticipated monthly gain in Canada's consumer price inflation. The USD/CAD currency pair plunged 47 base points, or 0.37%, to touch the intraday low of 1.2655, but right after that it reversed and continued to go back up to the 1.2700 area.

Statistics Canada reported on Friday that the country's consumer inflation marked a 0.7% monthly increase in January, putting an annual growth rate to 1.7% in the reported period. These gains were mainly supported by rising prices in all eight major components, from which household operations, furnishings and equipment index had the largest increase.

The Kiwi strengthened against the US Dollar on New Zealand's retail sales data on Thursday. The NZD/USD currency pair initially rose 0.17%, or 12 base points, to 0.7343, but soon after that it came down to the 0.7320 area.

Statistics New Zealand stated that the country's retail sales growth stepped up the game by gaining 1.7% in the December quarter, following an upwardly-revised 0.3% growth recorded in the prior period. The report showed that retail sales volumes soared mostly on the back of an increase in spending on food and beverages, supermarket shopping and cars. Westpac's Senior Economist Satish Ranchhod said that growth in spending will continue its steady pace in the early 2018.

The AUD/USD has formed a bullish W pattern, and we could see rejections from POC and POC2. At this point, the price is struggling to break daily H5 but is still above W L3 pivot. Traders should pay attention to bounces from 0.7860-68 (POC1) or 0.7840-53 (POC2) if the price retraces further. Target is 0.7920. A 4h close above 0.7820 should target 0.7982. Bears should be in control only below the X-Cross of the green trend line and W L3 - 0.7800.

W H3 -Weekly Camarilla Pivot (Weekly Interim Resistance)

W L3 - Weekly Camarilla Pivot (Weekly Interim Support)

W H3 - Weekly Camarilla Pivot (Weekly Interim Resistance)

W H4 - Weekly Camarilla Pivot (Strong Weekly Resistance)

D H4 - Daily Camarilla Pivot (Very Strong Daily Resistance)

D L3 – Daily Camarilla Pivot (Daily Support)

D L4 – Daily H4 Camarilla (Very Strong Daily Support)

POC - Point Of Confluence (The zone where we expect price to react aka entry zone)

The British pound has opened the new trading week strongly against the U.S dollar, following bullish comments from the Bank of England’s Dave Ramsden over the weekend. The GBPUSD pair is currently testing the key 1.4008 level, as hawkish comments on 2018 rate rises from Deputy BOE Governor Ramsden underpin early week pound strength. Moving into today’s European trading session, a sustained move above the key 1.4008 level is likely to encourage further sterling buying.

The GBPUSD pair is intraday bullish whilst trading above the 1.3968 level, key intraday resistance is currently located at the 1.4008 and 1.4080 levels.

Should GBPUSD price-action decline below the 1.3968 level, the pair may then move back toward the key 1.3938 and 1.3901 support level.

The euro continues to consolidate towards the lower end of its recent trading range against the greenback, ahead of a trading week defined by market moving risk events. The EURUSD pair currently trades just above the 1.2300 handle, with financial markets cautious ahead of new Federal Reserve Chair Jerome Powell's first testimony before U.S senate, and the upcoming Italian elections. In the short-term, EURUSD traders look towards New Home Sales data from the United States today and the key 90.00 level on the U.S dollar index.

The EURUSD pair remains bearish while trading below the 1.2321 level, further declines towards 1.2992 and 1.2259 seem likely.

Should the EURUSD pair start to trade below the 1.2321 level, buyers are likely to test resistance around the 1.2351 and 1.2390 levels.

Monday kicks off a highly active week in the financial markets. On the agenda is a steady stream of US economic data and an important speech from one of the Federal Reserve’s policymakers.

European data headline a light European release schedule on Monday. At 07:00 GMT, Nationwide will report on housing prices for February. A few hours later, the British Bankers Association (BBA) will report on mortgage approvals for the month of January. Approvals are expected to drop to 35,928 from 36,115 in December.

Switzerland will also release fourth quarter employment data at 08:15 GMT. Overall employment levels are expected to rise slightly to 4.963 million, compared with 4.956 million in Q3.

Ahead of the New York session, Federal Reserve Bank of St. Louis President James Bullard will deliver a speech. The remarks are scheduled for 13:00 GMT.

In terms of economic data, the Chicago Fed will release its National Activity Index at 13:30 GMT. The monthly report provides an overview of the nation’s overall economic health. For January, the National Activity Index is expected to read 0.15, down from 0.27 in December.

Later in the session, the Department of Commerce will report on new home sales for the month of January. The sale of new residential units is forecast to edge up 0.1% to a seasonally adjusted annual rate of 642,000. New sales dropped 9.3% the month before.

At 15:30 GMT, the Dallas Fed will report on manufacturing conditions in the Texas region. The Manufacturing Business Index for February is expected to read 28.4, down from 33.4 the previous month.

In currency news, the US dollar extended its recovery on Monday, with the DXY dollar index hitting a high of 90.00. The index bottomed at fresh three-year lows on 15 February but has since recovered 1.5%.

EUR/USD

Since hitting a high near 1.2600 ten days ago, the EUR/USD has given back nearly 300 pips. Although the pair remains in an uptrend, the bulls appear to be losing momentum as the dollar shows signs of rebounding. The pair is currently trading below 1.2300, with immediate resistance found at the 1.2340 region.

GBP/USD

Cable has also tapered off recent highs, as the US dollar continued to rebound from multi-year lows. The GBP/USD touched a session high of 1.3999 on Monday. The bulls are eyeing the 1.4025 level for signs of a bullish breakout.

USD/JPY

The USD/JPY was little changed on Monday, as the pair continued to hold below 107.00. A rebounding dollar drove the USD/JPY to a high of 107.81 last week. However, prices have been trending lower ever since. The pair has established a bottom of 105.70, which is the low from 16 February. A bearish reversal for the greenback could send USD/JPY below this key threshold.