Daily Insights Report 09/08/2017

• 9 Aug 2017

USD/CAD

The USD/CAD pair has hit a significant resistance level around the 1.269 price level which represented a previous top for the pair. If rejected, the next price level for the pair will be the 1.265 price level. A doji candle to open today’s trading session indicates indecision from the market and low volume suggests a lack of conviction from buyers currently, to drive prices higher. MACD has begun a decline from its strong bullish momentum and RSI has leveled flat under the overbought 70 line. The 20-period EMA does paint a different picture indicating that momentum is still bullish and the chart pattern appears to be following a loose flag formation. Current trading may in fact represent a pause for the pair before price head higher.

Impact event: Crude Oil Inventories data will be released at 17:30 GMT+3.

USD/JPY

The USD/JPY 4-hour chart shows that prices appear to be held up by a support level at 109.9 with buying pressure during the early Asian trading session. Volume appears to be declining suggesting a lack of appetite from investors to drive the pair in either direction. However, MACD has crossed the zero line, turning bearish and the 20-period EMA has a downward trajectory. RSI has flattened at the 30 line so the question is whether there is any room for further downside?

GOLD

Gold prices have broken both the 20-period EMA and the 1262 price level to test the 1265 price level. Momentum indicators suggest that the bullish momentum will not continue, as RSI has switched to a downward trajectory and MACD remains below the zero line. Volume has tailed off since the strong bearish move in yesterday’s trading session. The 1265 price level will prove significant; if the metal is able to break the price level, the next target will be the 1269 level.

GBP/USD

There are some interesting developments on the GBP/USD 4-hour chart with RSI bouncing off the 30 support zone, with a strong upward trajectory, coupled with a strong bullish candle. If the current candle can close above the 30 oversold line, bullish momentum is confirmed. As further confirmation, price action has met a previous support level at the 1.297 price line and after several tests, has bounced back to push prices higher. Price action still remains below the 20-period EMA and MACD remains negative, therefore, there is still some conviction required from Pound buyers to sustain the bullish move.