Much of the focus has been on equity markets this morning, but we have seen continued euro strength, while the loonie remains under severe pressure ahead of potential news from the Algeria energy summit.
GBP/USD suffers more lossesThe downward trend goes on here, with little sign so far that the pair is about to turn higher. The lows of July and August, around $1.2850, are holding for now, so until this breaks we are still looking at a possible bounce in coming days.
A rally needs to clear Thursday’s highs at $1.3121, which might then suggest a move back to the top end of the range around $1.3450.
EUR/USD puts buyers in chargeThe pair spent Friday gathering strength after losses in the overnight session, and this morning we have seen fresh buyers push the pair back towards the Thursday high at $1.1260, the area where gains stalled in the period 12-16 September.
Above here, we would expect a push on to $1.1320. Last week saw the pair’s downside movement stop at the 200-day simple moving average (currently $1.1154), so this is the area to watch if the situation turns negative again.
USD/CAD looks to move upFriday’s Canadian retail sales shocker meant that the embryonic downtrend was rapidly turned around, with the pair finding support around C$1.3030 and then surging.
Gains have so far stalled at C$1.3180, but further moves upward today should see the pair test the 200-day SMA (C$1.3243) again. C$1.3250 is the big level to watch, having essentially capped the pair since June.
USD/JPY comes under pressureThe pair has moved off the lows of last week near the key ¥Y100 level, but has come under pressure this morning. A rally needs to push on through ¥101.20, which would clear the way to the 50-day SMA at ¥102.29.
For now, the 2016 downtrend is in abeyance, with a fresh low below ¥100 needed to confirm that it will continue to push lower.
Otherwise, we continue to wait to see if the dollar can regain some ground this week and perhaps signal that a base is still being formed above ¥100.
