The US currency suffered significant losses within G3 after the Wednesday release of the FOMC Minutes. The EURUSD rally and USDJPY sell off have negated short/ intermediate term bull pressures for the US$ and leaves the currency vulnerable within G3 to further losses in the near term.
However, a resilient tone by the greenback against the Canadian and Australian Dollars leaves a downside bias for AUDUSD and bullish tone for USDCAD. We focus on the latter two spot rates below.
AUDUSD
- Another consolidation session on Friday leaves very little directional impetus into Monday, but the Thursday push through .7320 support, with the bounce short of modest resistance at .7380, sees a negative bias.
- Moreover, this leaves bigger picture bear pressures intact into latter August.
For Monday: We see a neutral tone between .7380 and .7280 (with a negative bias)
- Break above .7380 targets .7409 and aims for .7440/49, which we would look to try to cap.
- Break below .7280 aims for .7255, maybe .7214, which we would look to try to hold.
Short/ Intermediate-term Outlook – Downside Risks:
- Whilst below .7499 we see a negative tone resurfacing with the bearish threat to .7269 and .7091.
- Break sees psychological .7000.
Daily AUDUSD Chart
Monthly AUDUSD Chart
USDCAD
- A dip and a bounce Thursday from support seen at 1.3019/1.2993 through 1.3152/57 and 1.3184 resistance to leave upside risks Monday.
- Moreover, the strong July advance above the 2009 peak at 1.3064 to a 10 year high, leaves risks for a push higher into early August, to aim for further, long term upside targets.
For Monday:
- We see an upside bias for the 1.3214 cycle peak; break here aims for 1.3255, maybe closer to 1.3300/05.
- But below 1.3057/56 opens risk down to 1.3019/1.2993, which we would look to try to hold.
Short/ Intermediate-term Outlook – Upside Risks:
- We see a more positive tone with the bullish threat to 1.3346.
- Above here targets longer term levels at 1.3454 and 1.3819.
Daily USDCAD Chart
Monthly USDCAD Chart
