Let me start with the Dollar Index DXY first. Here, the price managed to bounce from the crucial support on the 92.6 and Friday managed to break the mid-term down trendline. That breakout gives us a positive sentiment and opens the door for a long-term bullish correction.
Our second instrument is USDCAD, which on Friday was influenced not only by data from the US but also from Canada. Both came above expectations but the positive sentiment towards the American currency is dominating. This does not come unexpectedly as the price created a false bearish breakout below very important horizontal support on 1.33. Again, false breakout worked and gave a strong signal in the opposite direction – north. The last thing to do here, for a proper long-term buy signal is to break the main down trendline.
I will finish with cable, which confirms the bounce from the 1.317 resistance. Sellers did this with a double bottom formation. A breakout of the psychological barrier on 1.3 will definitely confirm the negative sentiment. Potential target for this movement is the mid-term up trendline, connecting higher lows since the end of June.
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This article was originally posted on FX Empire
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