Correction on the USD

Wednesday brings us a small correction on the USD. The day is rather calm and the focus is shifted towards the Oil and the global indexes.

Cable is defending a very important support on the 1.265. In the same time, the price bounces of the lower line of the wedge formation. Both those factors are positive and increase the chances for a movement to the upper line of the wedge, 200 pips higher.

USDCAD created a pennant above the long-term up trendline (lower line of the flag). Usually this is bearish but sellers hesitated. As long as we stay below the 38,2% Fibonacci (and Fibos here are respected) there still is a chance for a major drop.

USDMXN touched a long-term horizontal resistance (which was a major support for a long time) and created a shooting star on a daily chart (so far). This shows that the supply is there ready to fight. Usually that is a sell signal but we have to wait till the end of the day for the confirmation.

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis