Intraday Market Analysis – CAD shows weakness

USDCAD bounces off critical floor

The Canadian dollar retreats dragged by weakness in oil prices, the country’s main export. The pair has been hovering above the daily support at 1.2820. The RSI’s double dip in the oversold area led some traders to buy the dip. A rally above 1.2930 would squeeze the short side. The bulls will need to clear 1.3020 before they could regain control and push back above 1.3130. Failing that, the path of least resistance would be down. A fall below 1.2820 would invalidate the July rally and cause a sell-off towards 1.2700.

EURJPY seeks support

The euro softened after manufacturing and service activities in the eurozone contracted in July. The pair has met stiff selling pressure at July’s high at 142.30. A break below 140.70 caused a liquidation of leveraged long positions and a bearish MA cross indicates an acceleration to the downside. The former support has turned into a resistance. 138.50 at the origin of a bullish breakout is the next support. 137.00 is a critical level from the daily chart and its breach could pave the way for a bearish reversal in the medium-term.

UK 100 consolidates

The FTSE 100 outperforms global peers supported by commodity and financial stocks. A tentative break above the supply zone around 7350 has put the index back on track. A bullish MA cross on the daily chart suggests that sentiment may have improved. The latest retracement found support on the 38.2% (7220) Fibonacci level. A close above 7350 would flush out the remaining selling interest and trigger an extended rally towards 7450. The 50% retracement level at 7180 is buyers’ second line of defence.

How do you feel the CAD will fare in the coming weeks? Open your Orbex account and trade now!