There were only few economic releases for today without any figures scheduled for the U.S trading session.
Beginning with Germany, the PPI MoM came out higher than expected at 0.2% against forecasts of 0.1%. Meanwhile, we have seen a depreciation compared to the previous month.
In the U.K, the public sector net borrowing decreased significantly by -1.5B in July from 7.5B previously. While in Canada, USD/CAD jumped to as high as 1.2892 level following weak economic data. The Canadian retail sales for the month of June retreated to -0.1% down from 0.0% previously. In the meantime, inflation contracted in the previous month as the figures showed deflationary pressure persisting with the MoM inflation change falling to reach -0.2% down from 0.2%, in addition, the YoY figures missed estimates and declined towards 1.3% compared to 1.5% in June.
USD/CAD rallied following this release, as the short-term technical picture matched the fundamental one sending the pair higher today. Looking at the 4-hour chart, prices have reached the 61.8% of the entire recovery that began from 1.2445 low and therefore, we were expecting to see strong buyers around this level, which stands at 1.2765. The pair managed to bounce strongly to reach as high as 1.2892 in early U.S trading session.
As of now, another extension to the upside remain possible in the coming days as the near-term trend switched from bearish to neutral. Meanwhile, the daily trend still negative, and consequently the upside potential is likely to remain limited in this pair as far as 1.3085 peak is in place.
Technically, the recent jump can reach as high as 1.2900-1.2930 resistance zone before the downside pressure resume.
Looking at the U.S Dollar price action ahead of Janet Yellen speech in Jackson Hole, the Greenback bounced on Friday as profit taking has begun ahead of the weekly close.
The Dollar recovered near 94.00 weekly support and by now, prices are testing an important bearish trend line in the hourly chart, and should see some sellers in the coming hours.
Overall, the bearish trend remain intact below 96.00 area in the daily chart, while in the hourly chart, if the recent recovery continue to gain some ground, then we expect this corrective wave to end around 94.90/95.00 resistance levels for another dip below 94.00 support.
GOLD
Gold failed to overtake 1357 hourly resistance for the third time in a row and the yellow metal showed another negative rejection candle yesterday. As of now, we can see that momentum indicators are beginning to turn lower, which warns about a potential corrective wave in the next days.
Technically, a re-test of the yearly high around 1375 level still possible. However, gold has shown three consecutive lower highs (1375-1367-1357) from its yearly peak and we will focus on a daily close below $1328 support to confirm a bearish reversal in the next hours. In the flipside, a break above 1357 resistance will bring the bullish outlook in the short-term and should expose $1375 soon.
To summarize, the positive trend started to show some signs of weakness in the hourly chart and traders should not be surprised if gold extend its losses soon as far as 1357 peak remain intact.
Support: 1333-1328-1320
Resistance: 1352-1357-1367
AUD/USD
The Aussie was the weakest currency in the FX market today as bears succeeded to push prices from 0.7700/0.7720 resistance zone.
Looking at the recent price action, the Aussie found strong resistance after reaching the daily resistance zone, which is considered as the last barrier before to reach the yearly high of 0.7830 and by now, a deeper correction in the direction of 0.7550 support remain possible.
However, we should for a daily close below 0.7600 support to confirm another extension to the downside in the pair.
Actually, our view has turned bearish in the short-term and as far as the pair keep trading below 0.7685 peak, downside pressure will persist.
Support: 0.7595-0.7550-0.7495
Resistance: 0.7685-0.7720-0.7760