EUR/USD, GBP/USD and USD/CAD Forecasts – US Dollar Still Soft

EUR/USD Technical Analysis

The Euro has initially pulled back just a bit during the trading session on Friday, but it looks like there is a bit of support below the 1.17 level. Because of this, the market is likely to continue to see a lot of volatility and choppiness because we are moving on headlines more than anything else.

We formed a nice W basing pattern, but really what kicked this off was the ceasefire coming out of the Middle East. Now the question is: will the ceasefire talks produce anything that lasts a little bit longer? That is probably what moves this market next.

Pay attention to the US 10-year yield. 4.3% seems to be an area that if we get above it too much, the US dollar starts to strengthen again. The target at this point, I would assume in the Euro, is probably the 1.18 level.

British Pound Technical Analysis

The British pound has pulled back as well, only to turn around and rally. This is a market that I think will go looking to the 1.35 level above. That’s a large round psychologically significant figure that’s been important a couple of times.

With this, the market is likely to be very choppy and noisy, but I also recognize that the market has a bit of support underneath it near the 50-day EMA and the 200-day EMA. But breaking above the 1.35 level could open up an attack on the 1.3550 level.

USD/CAD Technical Analysis

The US dollar tried to rally against the Canadian dollar, but it looks like it’s languishing a bit as we hang around the 200-day EMA. Ultimately, this is a market that given enough time will probably have to make a bigger decision, and it’s worth noting that there is significant support near the 1.3750 level, which is only about 75 pips underneath the 200-day EMA.

We also have the 50-day EMA there as well, so I do think the downside is somewhat limited here. But a lot of this will come down to risk appetite coming out of the Middle East as well, so pay attention to headlines. If we can bounce, I’d be looking at a move to about 1.3950 again.

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