GBPUSD is approaching a significant area of resistance between 1.2175 and 1.2210, which capped the topside several times in the past two weeks. The latest CFTC positioning data shows that speculators are still heavily short in GBPUSD, which could help the Pound if there is a short squeeze. However, there are still many uncertainties around Brexit, and there are very few GBP bulls around. The currency pair might therefore struggle to gain momentum, but that does not mean there could not potentially be a short squeeze in the short-term.
USOIL is consolidating around the 200 DMA and struggling to gain momentum. The falling trendline from the July high has capped the topside so far, and the pressure is growing. Oil bulls will need a clear break above $56 resistance, or the risk of the downtrend resuming may increase. To the downside, expect initial support at $54.20, followed by the July low around $50.40.
The recovery in USDJPY has been a slow one. While there is positive RSI divergence on the Daily chart, the currency pair is still struggling at the major resistance area between 107.00 and 107.20, which is also where the 21 DMA is currently resting. The downtrend remains intact, and it would need a clear break above 109 to change that. Given the current market sentiment, this appears rather unlikely. To the downside, traders may keep an eye on the major support levels at 105.70 and ahead of the 105 figure.
The USDCAD rally is gaining some momentum, although resistance between 1.3280 and 1.3330 has proven to be difficult to break. However, the Daily RSI is not showing overbought conditions yet, signaling there might be some room to the topside. A clear break above 1.3340 could pave the way for an extension of the rally towards 1.3435.
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Soaring US yields trigger the wrecking ball effect as yields become a source of volatility for risk, rather than a source of support