Apologies for a late weekly overview brief. It is still Sunday night here, but here goes. Friday’s U.S. and Canadian economic indicators caught me a bit off guard.
The U.S. Core CPI month over month data showed a 0.3% increase while CPI showed a 0.1% increase. The Canadian CPI jumped 0.1%, but CPI fell by 0.1% along with Core Retail Sales falling 0.5%. With these optimistic conditions and Yellen’s speech anticipating a rate hike this year, the U.S. Dollar continued with its gains.
EURUSD broke below of the previous resistance turned support zone. What does this mean? We are about to see a bearish. In the short term, there will be some sort of support turned resistance pattern before it continues further downwards. Euro remains bearish as the conditions in Greece are not helping matters. Perhaps I’m becoming a pessimist with all the Grexit anticipation published over on ZeroHedge.
This channel has been drawn a few times already, but this just may be the last time it’s going to be fitted. For a bearish breakout, the next move would target the 0.72 price area where a potential demand zone sits. I am still bearish on the short term.
If you take a look at the 15 minute time frame, notice the upper candle tails. This signals that downward selling pressure still exists despite the sharp sell-off near Friday’s close. Be prepared for a counter trend move as the traders cover their short position.
Finally, the bearish outlook in EURJPY seems to be finally taking place. Took a while, but this latest trendline breakout signals a bearish move over on this pair.
These are the main charts I’m looking at right now. The USDCAD pair was bearish in my opinion, but every since the breakout above the resistance zone I’ve let it alone. The COT report shows a slight net long position for the Canadian Dollar so I will update that chart in the upcoming weeks if U.S Dollar strength does not like it can continue.