USD/CAD
The US dollar fell against the Canadian dollar during the first part of the week to test the 1.35 level only to turn around and show signs of life. By turning around the way we have, we are forming a bit of a hammer for the week, and I think it's likely that if we were to break above the 1.3750 level and a move above that opens up the possibility of a move to the 1.40 level. Ultimately, this is a market that will continue to go sideways, perhaps trying to stay within the range we have been in for well over a year.
EUR/USD
The euro initially rallied during the week, but it seems to be struggling, hanging on to gains. And I think you've got a situation where traders will be trying to figure out whether or not we can continue the overall momentum. The US dollar of course has been oversold in multiple currencies, and the euro is one of the first places that people look to in order to figure out where things are going next. Even if we do break out to the upside, the measured move of the consolidation area that we had been in previously suggests that 1.23 is probably about as far as we go.
GBP/USD
The British pound initially rallied during the week but gave back about half the gains as we continue to see a lot of back-and-forth trading. This is a market that I think is going to continue to watch the area near the 1.3750 level, an area that I think is worth watching. And the break above there opens up the possibility of a move to the 1.39 level. A market breakdown from here will see the 1.35 level as support and then possibly the 1.33 level as support. The US dollar certainly seems to be fighting back in general.
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USD/MXN
The US dollar has fallen against the Mexican peso again, as it looks like we are trying to go down to the 17 level. If we break down below there, the 16.5 level might be a potential target. Any rally at this point in time would probably run into a lot of resistance near the 17.50 level, but more likely than not, we could find ourselves in some type of consolidation range as we had seen previously at this level in late 2023.
Silver
Silver continues to see a lot of noisy behavior as the market had a very volatile but neutral candlestick form for the week. It looks like the $80 level is a bit of a fulcrum for price and I think it's also essentially a magnet for price. The $70 level below has been a major support level with the $90 level being significant resistance. All things being equal, this is a market that I think will show a lot of noisy behavior.
Gold
The gold market has gone back and forth during the week as well, but it looks like we are looking at the $5,000 level as a potential area of magnetism for the market. Breaking above the $5,000 level opens up the possibility of a bigger move, but when I look at the last couple of candlesticks, we had a major Shooting Star formed a couple of weeks ago followed by a hammer and it suggests that we are going to continue to see a lot of questions and consolidation. I think the longer we stay near the $5,000 level though that would be a big sign of bullish behavior.
USD/CHF
The US dollar has fallen against the Swiss franc, but it looks as if it is going to continue to see a lot of support at the 0.76 level. If the market were to turn around from here, we would challenge the 0.79 level as major resistance. Ultimately, this is a market that is going to have the influence of the Swiss National Bank and the potential of it intervening if we fall too far, so I'm hesitant to get short anytime soon.
USD/JPY
The US dollar has fallen significantly against the Japanese yen during the course of the week and now is testing the 50-week EMA. If we turn around and rally from here, it's likely that the market goes looking to the 156-yen level, possibly followed by the 158-yen level. When you look at longer term charts, the 160-yen level where we had pulled back from a few weeks ago is a major resistance barrier going back to 1990.
This is a bearish looking candle stick for the week, but I do think there are plenty of buyers underneath. So, it might be a simple matter of waiting for stability to come back before we can start buying again. This is a pair I'll be watching closely, but as I'm saying right now, I am staying hands off.
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