Jul 26 2021 0
Last week's session was relatively boring. The currency market returned to low volatility, mainly creating price compression zones with small amplitudes without any sudden changes.
- US stocks broke to the top, dispelling fears of a sell-off.
- US July services PMI data of 59.8 was much lower than expected, 64.8.
- Canada's retail sales in June fell 2.1%, better than expectations for a 3.0% drop.
- The CFTC reported that the USD position is turning to a net long.
- The dollar edged higher at the end of the week with market attention turning to next week's Fed meeting after the European Central Bank showed dovishness in its July meeting.
- Conflict within the ECB deepened after the July meeting.
The price completed the triangle flag pattern and went up as expected, close to the 110.7 resistance area. This is the price range that we want to sell, but there is no trigger signal yet, we still need to wait.
The price continues to show a struggle around the 1.177 support area, there is no noticeable new signal yet. However, it can be seen from the price behavior that the sellers are still overwhelming and the buying power around the bottom of the box is very weak. We continue to wait for the opportunity to sell down when the price breaks out, the target will be around the 1.160 zone, however, it should be noted that the previous resistance area is 1.170. If there is a strong rejection signal here, consider exiting soon.
The price has approached the confluence of 1.380 but conflicting signals are appearing, above H4 it is a triangle flag pattern, suggesting the possibility of price increase. On the daily frame, there is a hanging man pattern, suggesting a possible price drop. Therefore, it is not appropriate to trade GBPUSD at this time, please wait patiently for more.
USDCAD also has low volatility in the last session of the week, creating a box with a very small margin, we continue the old tactic, wait to buy around 1.245 area, buy only when there is a strong, reliable bullish signal.
Selling pressure has reappeared around 0.74 area, however the signal it generated is quite weak (bearish pin bar pattern on daily), we might be reluctant to enter a sell position at this area, however. should only be exploratory orders, not enough positions should be entered.