Haven dollar demand drives EUR/USD, GBP/USD and USD/CAD
Haven flows help the dollar, while looks likely to gain further within EUR/USD, GBP/USD, and USD/CAD.
EUR/USD breaks key support amid dollar resurgence
EUR/USD slipped back below the $1.1688 support level yesterday, bringing an end to the more bullish outlook seen of late.
The prior break through $1.1832 did provide a potential bullish signal, yet the risk of a wider retracement of the $1.2011-$1.161 did remain. With the price having broken below $1.1688, it looks likely that the recent rally was such a retracement, with further downside looking likely from here. With that in mind, a bearish outlook is in play unless the price breaks through the $1.1759 swing high.
GBP/USD falls back towards key support level
GBP/USD has similarly been on the decline, with the dollar resurgence seen over the course of the week bringing us back towards the crucial $1.2863 support level.
A break below that point would signal an end to the recent trend of higher lows, bringing a more bearish picture once more. Thus the ability or inability to break below $1.2863 will dictate the short-term outlook for this pair.
USD/CAD looks likely to rise once more
USD/CAD has been on the rise as a double whammy of weaker energy prices and risk-off sentiment helping to accelerate the reversal of a long-standing downtrend. The rise through $1.3259 provides the completion of a bullish double bottom formation, with the price subsequently heading towards the $1.342 breakout level.
While we have not seen that level taken out yet, there is a good chance we will continue to move higher after this recent retracement. As such, further upside looks likely, with a decline below $1.3278 required to bring about expectations of a more drawn out retracement stage. Until then, this recent resurgence looks likely to continue apace.
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