The best morale exists when you never hear the word mentioned. When you hear a lot of talk about it, it's usually lousy.
The common currency hit a two-year high of $1.1905, benefiting from U.S dollar weakness after U.S. GDP data reflected contraction of an annualized 32.9% in the second quarter, the quickest pace since the Great Depression.
The cable surged to $1.3143 despite China’s ambassador to the UK, Liu Xiaoming, said that the actions of the UK, including questions over alleged rights abuses in China's Xinjiang region, had "poisoned" the relationship between the two nations.
The safe-haven yen vaulted to a 4.5-month low at 104.20 against the greenback on a tweet from U.S. President Donald Trump suggesting the November presidential election should be delayed, a radical idea that was immediately rejected by both Democrats and Republicans.
The Aussie topped a 17-month peak at $0.7225 after China's factory activity expanded in July for the fifth month in a row, beating analysts' expectations.
The rand nosedived to 16.94 and last traded at 16.78 against the U.S dollar, undermined by risk-taking from investors chasing high yields and a surge in global coronavirus infections spooked investors fearing a return of strict lock-downs.
The pair surged by 15 cents to 40.25(selling) on the local market.
13:00 - EUR - CPI (YoY)(JUL)
16:30 - CAD - GDP (MoM)(May)
After rallying from bottoming all time low at 101.20 to 111.71 in covid-fueled March period, dwarfing an expanding leading diagonal ((1)) in 5 waves, USD/JPY has ever since unfolded in a corrective double three combination pattern (W)-(X)-(Y) of wave ((2)).
From an Elliott Wave trading standpoint, the pair may experience further decline to the choppy downside to complete countertrend wave (Y) because- An impulse usually retraces to at least wave (4) of previous smaller trend, that is 105.19.
- Wave (4) of wave ((1)) coincides with 61.8% Fibonnacii retracement of wave ((1)), i.e 105.19.
- 78.6% projection wave (W) through (X) targets level 105.30.
- In EW lexicon, a pullback to the previous wave (2) usually happen to a leading diagonal ((1)).
- Post-triangle thrust measurement of wave B of (Y) leads exactly to 105.20.
- USD/JPY is still trading within the bearish parellel trendlines.
Thus, hibernation of price action could be seen in the locality of 105.30/19.On the flipside, a violent recoil to revive bullish momentum at 109.84 of June 4th would nullify this set-up, warning that the potency of positioning-derived bearish signal may be ebbing.
On the hourly Chart, The USD/CAD has found strong support again near $1.3350 region yesterday. The pair fell to as low as $1.3345 before bouncing off relentlessly to as high as $1.3444 this morning.
We feel that the USD/CAD could be in an early stage of a bullish run towards $1.4017 in the coming months.
On the downside, $1.3315 remains a strong baseline , while a break below that level would open the door for further weakness on the USD/CAD near $1.3200.