EUR/USD Breakdown, GBP/CAD, USD/CAD Breakouts Eyed this Week
- EURUSD below July 2012-July 2013 TL, needs below 1.3475.
It's admittedly another quiet start to the trading week, with fewer than ten economic data releases (including central banker speeches) on the calendar for Monday, July 21. Nevertheless, with geopolitical tensions brimming in Eastern Europe and the Middle East, now's not the time to stay away from the trading screen.
Rather, the low frequency of economic data combined with the high intensity of emotional news headlines crossing the wires makes for trading conditions better suited for technical traders as timing and precision increase in importance.
One overarching theme removed from the crisis gauntlet, renewed Euro depreciation, has a chance at influencing prices this week so long as focus continues to shift to the weak inflation, weak growth environment. It is within this context that we continue to eye EURUSD as it tests the ascending trendline from the July 2012 and July 2013 lows.
Additionally to start the week, we continue to monitor the GBP-crosses, but not necessarily for direct impact from the British Pound. Instead, GBPCHF serves our preferred proxy for EURGBP given the relationship between CHF and EUR since September 2011. GBPCAD remains a prime breakout opportunity, especially as USDCAD attempts to base off of major trendline support from the September 2012 and September 2013 lows.
See the video above for the aforementioned technical setups in GBPCAD, GBPCHF, EURUSD, and USDCAD, our four main non-crisis pairs (i.e., the JPY-crosses) that we're monitoring for potential breakout moves over the next several days.
--- Written by Christopher Vecchio, Currency Analyst
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