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Despite Rebound Efforts, CAD, NZD and GBP are Vulnerable to Further Losses

Technical Analysis

Video Analysis

The US currency posted minor losses on Friday in the wake of the US Employment report for July. However, underlying bear themes for the Canadian and New Zealand Dollars remain very much intact and we see bias into mid-August for a resumption of US Dollar gains versus these currencies.

Furthermore, having been range bound for 2-3 weeks, Cable (GBPUSD) is displaying a more negative bias for a downside correction for this week (although the underlying theme remains bullish).

USDCAD

  • A probe below support at 1.3067 Friday to ease immediate bullish pressures, but a rebound to signal a neutral tone into Monday.
  • However, 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.

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

USDCAD

NZDUSD

  • A firm rebound effort Friday, to nudge above modest resistance .6616, to leave the Monday bias closer to better barriers up at.6674 and .6738, which we would look to cap.
  • However, the previous the failure back from the probe of the intermediate-term trend line from late April and setback from below .6772, leaves risk for mid-August for the underlying bear trend to resume.

Short/ Intermediate-term Outlook – Downside Risks:

  • We see a negative tone with the bearish threat to longer term targets at .6404 and .6196/54.
  • Overshoot threat is lower to maybe .6000.

Daily NZDUSD Chart

nzdusd

GBPUSD

  • A Thursday setback from resistance at 1.5650 for a Friday push below support at 1.5466/64 and 1.5450 leaves a downside bias for Monday.
  • However, the early July push through resistances from June and the rally from our 1.5327 retrace support, leaves an upside risk into August.
  • Early this week we see a downside bias for 1.5422; break here aims for 1.5395, maybe 1.5327.
  • But above 1.5546 opens risk up to 1.5650.

Daily GBPUSD Chart

gbpusd

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