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USD/CAD Rebounds From Lows Ahead of US Employment Data

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Talking Points:

The USD/CAD is rebounding from monthly lows ahead of this Friday’s release of key US employment data. The US Change in Non-Farm Payrolls (May) is expected in at 180k, and the US Unemployment Rate (May) is expected at 4.4%. As high importance events on this week’s economic calendar, their release is expected to provide volatility and direction for US Dollar based pairs including the USD/CAD.

Technically the USD/CAD is trending higher in the short term, rising as much as 135 pips from the standing monthly low at 1.3387. This turn in price has been marked by the USD/CAD trading back above its 10 day EMA (exponential moving average) at 1.3494. Traders should note, that if the pair closes above this EMA it would be for the first time in the last 15 trading sessions. If prices continue to rise going into Friday’s news, this line may be referenced as a point of short term support. Alternatively if the USD/CAD fails to close above the 10 day EMA, it may continue to be referenced as a point of resistance. In a bearish scenario, traders may again look to target the previously mentioned monthly low at 1.3387.

USD/CAD Daily Chart Averages

USD/CAD Rebounds From Lows Ahead of US Employment Data

(Created Using IG Charts)

Why and how do we use IG Client Sentiment in trading? See our guide.

Sentiment totals for the USD/CAD remain net positive, with IG Client Sentiment reading at +1.18. This total reveals that 54.2% of traders are currently long the pair. When read as a contrarian indicator, this sentiment reading maintains a slight bearish bias for the pair. If prices convincingly breakout above the 10 day EMA, traders should look for sentiment figures to flip negative as the pair resumes trending higher. Alternatively if prices are rejected near present values, traders may look for sentiment readings to remain positive. If news later in the week sends the USD/CAD lower, it would be expected to see sentiment values move towards fresh positive extremes of +2.0 or more.

USD/CAD Rebounds From Lows Ahead of US Employment Data

— Written by Walker, Analyst for DailyFX.com

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EURUSD Weekly Technical Analysis: New Month, More Weakness

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What’s inside:

  • EURUSD broke the ‘neckline’ of a bearish ‘head-and-shoulders’ pattern, April trend-line
  • Resistance in vicinity of 11825/80 likely to keep a lid on further strength
  • Targeting the low to mid-11600s with more selling

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Coming into last week we pointed out the likelihood of finally seeing a resolution of the range EURUSD had been stuck in for the past few weeks, and one of the outcomes we made note of as a possibility was for the triggering of a ’head-and-shoulders’ pattern. Indeed, we saw a break of the ’neckline’ along with a drop below the April trend-line. This led to decent selling before a minor bounce took shape during the latter part of last week.

Looking ahead to next week the euro is set up for further losses as the path of least resistance has turned lower. Looking to a capper on any further strength there is resistance in the 11825-11880 area (old support becomes new resistance). As long as the euro stays below this area a downward bias will remain firmly intact.

Looking lower towards support eyes will be on the August low at 11662 and the 2016 high of 11616, of which the latter just happens to align almost precisely with the measured move target of the ‘head-and-shoulders’ pattern (determined by subtracting the height of the pattern from the neckline).

Bottom line: Shorts look set to have the upperhand as a fresh month gets underway as long as the euro remains capped by resistance. On weakness, we’ll be watching how the euro responds to a drop into support levels.

For a longer-term outlook on EURUSD, check out the just released Q4 Forecast.

EURUSD: Daily

EURUSD Weekly Technical Analysis: New Month, More Weakness

—Written by Paul Robinson, Market Analyst

You can receive Paul’s analysis directly via email bysigning up here.

You can follow Paul on Twitter at@PaulRobinonFX.

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Euro Bias Mixed Heading into October, Q4’17

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Euro Bias Mixed Heading into October, Q4'17

Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.

EURUSD: Retail trader data shows 37.3% of traders are net-long with the ratio of traders short to long at 1.68 to 1. In fact, traders have remained net-short since Apr 18 when EURUSD traded near 1.07831; price has moved 9.6% higher since then. The number of traders net-long is 15.4% lower than yesterday and 16.4% higher from last week, while the number of traders net-short is 0.4% higher than yesterday and 10.5% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EURUSD prices may continue to rise. Positioning is more net-short than yesterday but less net-short from last week. The combination of current sentiment and recent changes gives us a further mixed EURUSD trading bias.

— Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

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British Pound Reversal Potential Persists Heading into New Quarter

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British Pound Reversal Potential Persists Heading into New Quarter

Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.

GBPUSD: Retail trader data shows 38.2% of traders are net-long with the ratio of traders short to long at 1.62 to 1. In fact, traders have remained net-short since Sep 05 when GBPUSD traded near 1.29615; price has moved 3.4% higher since then. The number of traders net-long is 0.1% higher than yesterday and 13.4% higher from last week, while the number of traders net-short is 10.6% lower than yesterday and 18.3% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBPUSD prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current GBPUSD price trend may soon reverse lower despite the fact traders remain net-short.

— Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

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