The USD/CAD pair fell during the course of the week, testing a significant uptrend line in this pair. It is because of this that I feel we need to pay attention to this market over the next week or so. I also believe that the 1.30 level just below will be massively supportive, so there is a chance we get a bounce off of their as well. I am not looking to short this market anymore, and believe that sooner or later the buyers get involved.
Clearly, the Euro is going to rise from here. We sold off rather drastically after the ECB announcement, and then turn right back around to form a very positive looking candle. I think this week we try to get up to the 1.13 level, but it will probably be easier done off of shorter-term charts.
The USD/JPY pair initially fell during the course the week but turned back around to form a nice-looking hammer. Because of this, it looks as if the parity is trying to build up enough momentum to bounce from here, and I believe that the signal to start buying this particular currency pair is going to be a move above the 115 handle. If we get that, I don’t see why we don’t go all the way to the 118 level next.
The British pound has sold off rather wickedly over the last several months, but we’ve had a couple of weeks of strength now. I think this is a simple return to the 1.45 handle where we should see sellers. In other words, I believe that this is essentially a “to speed market” as there will be more than enough bearish pressure at the 1.45 level to turn things around. The meantime though, I would anticipate that the buyers will take control and push this market to the upside over the next week.