Daily Insights Report 01/08/2017

• 1 Aug 2017

NZD/USD

The NZD/USD pair has retraced from an extended rally towards the end of July, as a bullish flag formation took price action higher. After a doji candle at the top of the trend, the pair has retraced and is now testing the 38.2 Fibo level. This price level is now acting as support and clearly a break of this level gives significance to the downtrend. MACD and RSI remain in positive territory with an upward trajectory, indicating a bullish reversal is still possible.

Impact event: ISM Manufacturing PMI at 17:00 GMT+3 will impact all dollar pairs. Global Dairy Price Auction at 17:00 GMT+3 will impact the NZD.

EUR/GBP

EUR/GBP has found a support level at the 61.8 Fibo level. Price briefly broke the support line and turned bullish. However, a bullish reversal is not confirmed by momentum indicators, with RSI and MACD both having downward trajectories, despite MACD remaining in positive territory.

Impact event: GBP Manufacturing PMI at 11:30 GMT+3 and EU GDP data at 12:00 GMT+3.

USD/JPY

The USD/JPY pair is testing a previous support level at the 110.22 price level. Two doji candles at the resistance line indicate indecision in the market and clearly a break of this resistance level would give weight to the uptrend. The next target for price action will be the 110.37 price level. RSI has bounced off the 30 support area, yet MACD remains strongly in negative territory. Volume appears to be declining indicating there may not be enough support for the bullish move.

USD/CAD

The USD/CAD is approaching the 20-period EMA at the 1.248 price level which has been acting as a support level for the pair. Momentum indicators suggest that sentiment remains only slightly bullish with MACD bouncing close to the zero line. RSI has flattened just above the 50 support level which can be used as a sell indicator. Volume has dropped off in recent trading sessions as the dollar begins to make a moderate recovery.