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USDCAD lost the battle with the 200-day simple moving average (SMA) on Thursday and tumbled to a three-week low of 1.2556 after two days of waiting to cross above the line and the 1.2655 resistance.

The price is currently trading near a familiar constraining zone, which has been frequently limiting upside and downside moves around 1.2565 for more than a year now. Questions, however, are rising about whether it will successfully stage a meaningful rebound at this point as technical signals keep deteriorating. In momentum indicators, the RSI is clearly trending to the downside below its 50 neutral mark and is still some distance above its 30 oversold level. Similarly, the MACD remains negatively charged below its red signal and zero lines, painting a blurry picture for short-term trading too.

If the sell-off intensifies in the coming sessions, the next turning point could develop within the 1.2500 – 1.2465 region, where the tentative ascending trendline drawn from the 1.2006 bottom is also passing through. Should the bears accelerate below 1.2400, the door would open for the key 1.2310 territory.

Alternatively, a bounce on 1.2565 may see a test around the 200-day SMA at 1.2655, while slightly higher, the 50-day SMA at 1.2700 will be closely watched as well before the focus shifts to the 20-day SMA at 1.2800.

In brief, USDCAD is expected to extend its bearish cycle in the short term, likely bringing the 1.2500 mark next under the spotlight.

EUR/USD

During yesterday’s trading session, the bulls found the level at 1.0640 to be a good opportunity to enter the market and we witnessed a rally that led to an increase in the value of the euro against the U.S. dollar, which led the pair towards the critical resistance at 1.0746. At the time of writing, the pair is testing this resistance zone and a confirmed breach of this level would pave the way for the pair towards the psychological level at 1.0800. In the opposite direction, in case the bears prevail, then a downward movement towards the support at 1.0641 may take place instead. However, even if the bears take control, the pair may still enter a consolidation phase in the range of 1.0641 – 1.0746. During today's session, market participants will closely follow the announcement of the retail sales data for the eurozone (09:00 GMT), as well as the non-farm payroll change data for the U.S. (12:30 GMT) and the unemployment rate change data, also for the U.S. (12:30 GMT).

USD/JPY

The pair is consolidating in the narrow range of 129.54 – 130.23 after the initial strong dollar rally that we witnessed since the beginning of this week. The consolidation may continue during today’s trading, but the buyers will likely be cautious because a deeper correction may develop as the Ninja may try to recover part of its recent losses before a possible resumption of the uptrend is to take place. Only a confirmed breach of the resistance at 130.23, however, would strengthen the positive expectations for a possible expansion of the upward trend. If this scenario is realised, then the next target for the bulls would be the resistance level at 131.22. In case the bears manage to violate the lower border of the range, their next target would be the support at 128.56.

GBP/USD

The pair successfully bounced back from the support at 1.2470 and the bulls convincingly led the pair towards a test of the resistance at 1.2587. In the early hours of today’s trading, the pair is hovering just below this level and, if they manage to overcome it, then an upward movement towards the resistance at 1.2657 is а highly possible scenario. However, if this level resists the bullish pressure, then it could be expected for the pair to remain in the range of 1.2587 – 1.2470.

EUGERMANY40

The value of the index increased by approximately 2% since the beginning of yesterday’s trading session, and the confirmed breach of the resistance at 14580 may be considered as a signal for a continuation of the upward move. If the price holds above this level, then we may expect a further appreciation towards the next resistance at 14910. In case the bullish momentum fades and the price falls below 14580, then the index may return in the range of 14580 – 14310, with a possible test of the lower border being on the map as well.

US30

The U.S. blue-chip index gained some ground during yesterday’s trading session, but the bulls could not gain enough momentum to attack and violate the resistance at 33458, and so the consolidation phase in the range of 32551 – 33458 is still intact. The overall market outlook remains positive – for a further appreciation towards the psychological level at 34000, but only a successful violation of the upper border of the range may give the bulls a chance to attack the mentioned level.

Daily Pivots: (S1) 162.49; (P) 162.96; (R1) 163.79; More...

Intraday bias in GBP/JPY remains on the upside as rebound from 155.57 is in progress to retest 168.40 high. Firm break there will resume larger up trend. On the downside, below 160.92 minor support will turn bias back to the downside for extending the correction from 168.40.

In the bigger picture, up trend from 123.94 (2020 low) is still in progress. Sustained break of 61.8% retracement of 195.86 (2015 high) to 122.75 (2016 low) at 167.93 will be a long term bullish signal, and could pave the way back to 195.86 high. This will now remain the favored case as long as 150.95 support holds, even in case of deep pull back. However, firm break of 150.95 will indicate rejection by 167.93, and bearish trend reversal.

Daily Pivots: (S1) 138.80; (P) 139.20; (R1) 140.00; More....

Intraday bias in EUR/JPY stays on the upside at this point. Decisive break of 139.99 resistance will confirm larger up trend resumption. Next target 61.8% projection of 124.37 to 139.99 from 132.63 at 142.28. On the downside, below 138.18 minor support will delay the bearish case and turn intraday bias again first.

In the bigger picture, up trend from 114.42 (2020 low) is in progress. Such rise is seen as the third leg of the pattern from 109.30 (2016 low). Next target will be 100% projection of 114.42 to 134.11 from 124.37 at 144.06. In any case, outlook will now remain bullish as long as 124.37 support holds, in case of deep pull back.

Daily Pivots: (S1) 0.8521; (P) 0.8536; (R1) 0.8561; More...

EUR/GBP is still bounded and range trading and intraday bias stays neutral. Further rally is in favor with 0.8365 support intact. On the upside, break of 0.8617 will resume rise from 0.8201 medium term bottom to 0.8697 medium term fibonacci level. However, break of 0.8365 will dampen this bullish view, and turn bias back to the downside instead.

In the bigger picture, a medium term bottom could be in place at 0.8201, on bullish convergence condition in daily and weekly MACD. Rise from there could either be a correction to the down trend from 0.9499 (2020 high), or a medium term up trend itself. In either case, further rise should be seen to 38.2% retracement of 0.9499 to 0.8201 at 0.8697. Sustained break there will target 61.8% retracement at 0.9003.

Daily Pivots: (S1) 1.4745; (P) 1.4831; (R1) 1.4879; More...

Intraday bias in EUR/AUD remains on the downside for the moment as fall from 1.5277 is in progress. Corrective rebound from 1.4138 should have completed at 1.5277, ahead of 1.5354 resistance. Break of 1.4597 support will bring retest of 1.4318 low. On the upside, above 1.4965 minor resistance will mix up the outlook and turn intraday bias neutral first.

In the bigger picture, as long as 1.5354 support turned resistance holds, larger down trend from 1.9799 (2020 high) is still expected to continue. On resumption, next target is 61.8% projection of 1.9799 to 1.5250 from 1.6434 at 1.3623, which is close to 1.3624 long term support (2017 low). However, firm break of 1.5354 will indicate medium term bottoming and bring stronger rally back to 1.6434 key resistance.

Daily Pivots: (S1) 1.0241; (P) 1.0272; (R1) 1.0325; More....

Further decline is expected in EUR/CHF with 1.0335 resistance intact. Corrective rebound from 0.9970 could have completed at 1.0513. Break of 1.0086 will bring retest of 0.9970. On the upside, though, break of 1.0335 minor resistance will dampen this bearish case, and turn bias back to the upside for 1.0513 resistance.

In the bigger picture, as long as 1.0505 support turned resistance (2020 low) holds, long term down trend from 1.2004 (2018 high) is expected to continue. Next target is 100% projection of 1.2004 to 1.0505 to 1.1149 at 0.9650. However, firm break of 1.0505 will suggest medium term bottoming, and bring stronger rebound towards 1.1149 structural resistance.

Daily Pivots: (S1) 1.0677; (P) 1.0715 (R1) 1.0784; More...

Intraday bias in EUR/USD remains neutral for the moment. On the upside, break of 1.0786, and sustained trading above 55 day EMA (now at 1.0757) will target 1.0935 resistance next. On the downside, however, break of 1.0626 minor support will indicate rejection by 55 day EMA, and turn bias back to the downside for retesting 1.0348 low instead.

In the bigger picture, focus stays on 1.0339 long term support (2017 low). Decisive break there will resume whole down trend from 1.6039 (2008 high). Next target is 61.8% projection of 1.3993 to 1.0339 from 1.2348 at 1.0090. However, firm break of 1.0805 support turned resistance will delay this bearish case and bring medium term corrective rebound first.

Daily Pivots: (S1) 1.2500; (P) 1.2543; (R1) 1.2618; More...

Intraday bias in GBP/USD remains neutral at this point. On the upside, above 1.2666 will resume the rebound from 1.2154. Sustained of 55 day EMA (now at 1.2726) will target 1.2999 support turned resistance. On the downside, though, break of 1.2457 minor support will turn bias back to the downside for retesting 1.2154 low instead.

In the bigger picture, fall from 1.4248 (2018 high) could be a leg inside the pattern from 1.1409 (2020 low), or resuming the longer term down trend. Deeper decline is expected as long as 1.2999 support turned resistance holds. On resumption, next target is 1.1409 low.

Daily Pivots: (S1) 0.9556; (P) 0.9597; (R1) 0.9621; More...

No change in USD/CHF's outlook and intraday bias remains neutral for the moment. Strong support is expected from 61.8% retracement of 0.9193 to 1.0063 at 0.9525 to complete the pull back from 1.0063. On the upside, above 0.9763 minor resistance will turn bias back to the upside for retesting 1.0063 high. However, sustained break of 0.9525 will bring deeper decline to 0.9193 support.

In the bigger picture, down trend from 1.0342 (2016 high) should have completed with three waves down to 0.8756 (2021 low) already. Rise from 0.8756 is likely a medium term up trend of its own. Next target is 1.0237/0342 resistance zone. This will remain the favored case as long as 0.9471 resistance turned support holds. However, sustained break of 0.9471 will extend long term range trading with another falling leg.