Bearish GBP/USD Pattern in Focus, USD/CAD Target

 | Sep 02, 2014 01:09PM ET

h2 Talking Points/h2

  • GBP/USD Retains Descending Channel Ahead of BoE; March Low (1.6458) on Horizon?
  • USD/CAD to Test 1.1000 on Dovish BoC; Lower-High in Place?
  • US DOLLAR Remains Overbought; Monthly Opening Range in Focus.

  • Remains at risk of a further decline as the descending channel remains in play, while the Relative Strength Index (RSI) dips back into oversold territory; next key objective is the March low (1.6458).
  • Need to see a larger dissent within the Bank of England (BoE) to see a material shift in the near-term outlook for GBP/USD.
  • The DailyFX Speculative Sentiment Index (SSI) shows retail crowd is increasing their net-long exposure on GBP/USD as the ratio climbs to +2.10.

  • Appears to have carved a higher-low in August following the failed attempts to close below 1.0820 (61.8% retracement) to 1.0830(61.8% retracement).
  • May see a more meaningful run at 1.1000 handle should the Bank of Canada (BoC) retain a relatively dovish tone and call for a prolonged period of interest rate stability.
  • Need a bullish break in the RSI to favor a higher-high & resumption of the long-term bullish trend.

USDOLLAR

Index
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Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

10702.33

10707.06

10651.73

0.45

196.11%