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  • 🇳🇱 Inflation Rate YoY (JUL) Actual: 1.4% Expected: 1.6% Previous: 2% https://www.dailyfx.com/economic-calendar#2021-08-05
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 93.96%, while traders in France 40 are at opposite extremes with 78.94%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/ckOcIy4HK4
  • The US Dollar could lose some ground against ASEAN currencies such as the Singapore Dollar and Thai Baht amid slowing Emerging Asia Covid case growth. Softer US NFPs may also bode well.Get your market update from @ddubrovskyFX here:https://t.co/jnJ80hQR4P https://t.co/x37yml0Cow
  • Forex Update: As of 04:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 0.18% 🇳🇿NZD: 0.11% 🇨🇦CAD: 0.09% 🇪🇺EUR: -0.01% 🇨🇭CHF: -0.08% 🇯🇵JPY: -0.19% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/as8Ba27Vtx
  • Heads Up:🇳🇱 Inflation Rate YoY (JUL) due at 04:30 GMT (15min) Expected: 1.6% Previous: 2% https://www.dailyfx.com/economic-calendar#2021-08-05
  • Indices Update: As of 04:00, these are your best and worst performers based on the London trading schedule: US 500: 0.18% Wall Street: 0.17% Germany 30: 0.07% FTSE 100: 0.05% France 40: 0.02% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/o3SdNfYFba
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  • Heads Up:🇮🇩 GDP Growth Rate QoQ (Q2) due at 04:00 GMT (15min) Expected: 2.94% Previous: -0.96% https://www.dailyfx.com/economic-calendar#2021-08-05
  • The US Dollar seems to be losing its momentum against ASEAN currencies as of late. Could this be another top in USD/SGD, USD/THB, USD/PHP and USD/IDR? Find out from @ddubrovskyFX here:https://t.co/rVBKBuhhAb https://t.co/xPtI6toGbx
Near-term Trade Setups in USD/CAD and EUR/USD

Near-term Trade Setups in USD/CAD and EUR/USD

Michael Boutros, Strategist

Review this week's Strategy Webinar for an in-depth breakdown of this setup and more.

USD/CAD Price Chart - Loonie 120min

USD/CAD Price Chart - Loonie 120min - US Dollar vs Canadian Dollar

In this week’s Canadian Dollar Price Outlook we noted that the Loonie, “breakdown has price testing the first major support pivot (1.3258) and while the broader outlook remains weighted to the downside, we could see some price exhaustion here…Look for price exhaustion into the upper parallels for possible entries with a break of the lows targeting more significant support into the 1.32-handle."

USD/CAD rallied off that mark this week with the advance now targeting confluence resistance at 1.3357/63- a region defined by the median-line of the descending pitchfork formation extending off the May highs, the 38.2% retracement of recent sell-off, the May swing low and near-term up-channel resistance. Looking for failure / exhaustion heading into this zone with a break below channel support targeting weekly open support at 1.3238 and the 61.8% extension / lower parallel at ~1.32.

New to Forex? Get started with our Beginners Trading Guide!

USD/CAD Trader Sentiment

USD/CAD Trader Sentiment - US Dollar vs Canadian Dollar Price Chart - Loonie Positioning
  • A summary of IG Client Sentiment shows traders are net-short USD/CAD - the ratio stands at -1.12 (47.2% of traders are long) – neutral reading
  • Long positions are 14.5% lower than yesterday and unchanged from last week
  • Short positions are 3.2% higher than yesterday and 9.0% lower from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests USD/CAD prices may continue to rise. Traders are further net-short than yesterday & last week, and the combination of current positioning and recent changes gives us a USD/CAD-bullish contrarian trading bias from a sentiment standpoint.

See how shifts in Loonie retail positioning are impacting trend- Learn more about sentiment!

EUR/USD Price Chart - Euro 120min

EUR/USD Price Chart - Euro 120min

I highlighted this ascending pitchfork formation in this week’s Euro Price Outlook while noting that the immediate risk was for a pullback towards the lower parallel. The pullback broke below confluence support at 1.1286 today and leaves price vulnerable to further losses near-term. That said, I’m on the lookout for downside exhaustion / long-entries heading into the 1.1250/56 support zone- a region defined by the Friday swing-low and the 38.2% retracement of the late-May advance.

Interim resistance stands at the 61.8% retracement / weekly open at 1.1317/21 with a breach of the highs keeping the 1.1374 & 1.1393 resistance targets in view. Review my latest EUR/USD Weekly Price Outlook for a look at the longer-term Euro technical trade levels.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

-Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michaelon Twitter @MBForex

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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