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US Dollar Forecast: USD/CAD, GBP/USD, EUR/USD Levels to Watch

US Dollar Forecast: USD/CAD, GBP/USD, EUR/USD Levels to Watch

2020-10-09 08:45:00
Justin McQueen, Analyst
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USD, EUR/USD, USD/CAD, GBP/USD Analysis & News

  • USD/CAD Biased Lower, 50DMA Gives Way
  • GBP/USD Trading in Ranges as Volatility Persists
  • EUR/USD Price Action Muted
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No news is evidently good news across markets with the path of least resistance being higher in the equity space. That said, amid a lack of key catalysts, FX markets have traded with little conviction and thus continued to hold rather narrow ranges.

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US Dollar Forecast: USD/CAD, GBP/USD, EUR/USD Levels to Watch

USD/CAD Biased Lower, 50DMA Gives Way

Positive spillover from the oil complex has sparked slight outperformance in CAD relative to its major counterparts. On the downside for USD/CAD, bids reside at 1.3130-50 with more ahead at 1.3100. Topside resistance at 1.3228 (50DMA), while a break opens the door to 1.3150-65. Momentum remains tilted to further losses as equities and oil prices trend higher, as such, bounces in USD/CAD may be shallow.

(Implied range based on option pricing: 1.3150-1.3240)

USD/CAD BULLISH
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -3% 1% -1%
Weekly -31% 14% -15%
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GBP/USD Trading in Ranges as Volatility Persists

Back and forth Brexit related headlines sees GBP trading in volatile fashion. Offers layered at 1.2970-75 and 1.3000 has curbed GBP/USD upside in the absence of a Brexit breakthrough. 1.2920 holds overnight, however, a break puts support at 1.2890-1.2900 in focus with a move below opens up weekly support at 1.2840-50. Bias is cautiously higher, however, GBP has struggled for direction amid the lack of Brexit clarity.

(Implied range based on option pricing: 1.2850-1.3010)

GBP/USD BEARISH
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 10% -12% -1%
Weekly 29% -39% -15%
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EUR/USD Price Action Muted

Several multi bln option expiries from 1.1725-1.1820 is likely to contain price action in EUR/USD, as such, the bias is mixed and trading range is likely to remain tight. Near-term topside at 1.1790-1.1800 remains firm amid two failed attempts this week for Euro, while 1.1720-30 acts as support for the pair.

Option Expiries: 1.1725-30 (1bln), 1.1740 (1.3bln), 1.1770-80 (1bln), 1.1795-1.1800 (1.6bln), 1.1810-20 (1.2bln)

(Implied range based on option pricing: 1.1720-1.1795)

EUR/USD BEARISH
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 18% -12% 0%
Weekly 38% -38% -17%
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