USDCAD breaks major resistance
The Canadian dollar slipped after July’s retail data fell short of expectations. The current rally continues to accelerate after the US dollar rose to a fresh two-year high above 1.3420. A lack of selling pressure enables the bulls to push towards July 2020’s high at 1.3640. Though short-term price action could use a little breathing room after the RSI ventured into overbought territory multiple times. 1.3390 would be the first support in case of pullback, and strong interest could be expected from bullish trend followers.
EURGBP breaks higher
The pound tumbles as Britain’s new fiscal stimulus raises doubts about its debt burden. A previous break above June’s high at 0.8720 had flushed out the remaining selling interest. Following a brief consolidation, the euro’s surge above 0.8780 triggered a runaway rally to a two-year high at 0.9290. The RSI’s extreme overbought condition may cause profit-taking with 0.8930 near the base of the momentum and the 20-hour moving average as a fresh support. Further extension may carry the pair to March 2020’s high at 0.9500.
GER 40 falls through critical floor
The Dax 40 plunged over wide-spread unease about the direction of inflation and rate hikes. A fall below the double bottom at 12420 invalidated the bounce over the past few months and signalled a return to the bear market. Strong momentum is a sign of liquidation as the last bulls rush to the exit. As the RSI sank into the oversold area, the psychological level of 12000 may see some buying. However, bounces may be capped below 12500 where the bears could double down and push towards October 2020’s low around 11400.
