The US dollar made a nice comeback and is enjoying an extended rebound. The Canadian dollar remains on the back foot in this environment.
The team at SocGen explains with a chart:
Here is their view, courtesy of eFXnews:
AÂ recovery in the USD Index has materialized this week and the index is now testing previous lows around 96.00, which coincides with the previous down sloping channel, notes SocGen.
“A break above will signal an extended rebound towards highs formed late April at 98.40,†SocGen adds.
Turning into USD/CAD, SocGen that it’s most likely forming a bullish engulfing as the weekly close is mostly positive.
“Weekly RSI is inching higher from the graphical level of 50% highlighting 1.20/1.1970 as an important level.The ongoing rebound is likely to continue towards the neckline of the H&S pattern at 1.24. A sustained move above will stretch the recovery further,†SocGen projects
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