USD Shaking Off Selloff? USD/CAD Breakout in Flux
- GBPUSD declines into July 2013 low, wedge base.
- USDCAD retests breakout level - 1.2800 may be up next.
- See the March forex seasonality report for trends in the QE-era.
The Canadian employment report release today will be a major factor in whether or not USDCAD breaches C$1.2800. Price action the past 48-hours has been constructive, and rather textbook in terms of what you'd expect to see amid a triangle thrust higher: resistance is broken (1.2620); former highs are sold (1.2798); breakout resistance holds up as support (1.2600-1.2620, descending TL); resulting in a retest of the highs (1.2798 and beyond).
Elsewhere, the US Dollar is starting to push back higher against its major counterparts, with EURUSD trading back below $1.0600 and GBPUSD falling as low as $1.4810/15 - coincidentally the low in July 2013. The GBPUSD move is particularly intriguing as it marks completion of the bearish rising wedge that developed from July 2013 to July 2014. That's not to say GBPUSD can't decline any further; but it may help alleviate pressure on other GBP-crosses like EURGBP.
See the above video for technical considerations in EURUSD, USDCAD, AUDUSD, and GBPUSD.
Read more: Has Pre-FOMC US Dollar Correction Begun?
--- Written by Christopher Vecchio, Currency Strategist
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