By Mexgroup.com

USD/CAD Broader Rebound Expected

The USD/CAD rallies aggressively on the short term and extends the last two day’s increase. Is moving higher as the dollar index has managed to rebound after the massive drop. USDX has climbed above the 92.49 major static support, signaling that we had a false breakdown. Is premature to say that we’ll have a larger increase on the USDX because is trapped below some major resistance levels.

Personally, I would like to see a retest of the 92.49 horizontal obstacle before will climb much higher, a minor accumulation will bring more buyers.

USD/CAD rallied on the positive United States data, the ADP Non-Farm Employment Change jumped much higher than expected, was reported at 237K, much higher than the 185K estimate and versus the 201K in the previous reading period, while the Prelim GDP rose by 3.0% in Q2, beating the 2.7% estimate and the 2.6% growth in Q1. Moreover the Prelim GDP Price Index surged by 1.0% in the second quarter, matching expectations. The Loonie lost significant ground versus the USD even if the Canadian Current Account has come in better than expected, has decreased from -12.9B to -16.3B, less versus the -17.3B estimate.

Price jumped much above 1.2549 yesterday’s high and managed to climb also above the fourth warning line (wl4), which represents a strong dynamic resistance. The USD has taken the lead as the USDX rallied today. Technically is expected to climb much higher on the short term after the retest of the median line (ml) of the minor descending pitchfork. You can see that has retested the 1.2460 static support as well, but most important has retested the lower median line (LML) of the major ascending pitchfork and closed much above it, signaling a broader rebound.

NZD/USD Head and Shoulders

Price dropped sharply today and erased the last three day’s increase. Was almost to reach and retest the 50% retracement level, but has found temporary support right above it. Should drop further if will close under the red downtrend and under the neckline of the potential Head and Shoulders pattern. A retest of the broken dynamic support levels will confirm a further drop.

EUR/JPY Bounce or Break?

Price is still trading in the green after the retest of some important resistance levels. EUR/JPY rallied in the last day’s, but now was stopped by the confluence area formed by the wl1 with the red uptrend line. Now is still pressuring the median line (ml) of the black ascending pitchfork, a rejection from here will signal a broader drop. Only a valid breakout will confirm a further increase.

By Olimpiu Tuns

Market Analyst

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The post Daily Market Report – USD/CAD Getting Stronger On Bullish Pressure August 30, 2017 appeared first on mexgroupblog.