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Trading ideas for EUR/USD, USD/CAD and USD/JPY

August 24, 2021

EUR/USD: The euro-strengthened dollar on Monday as world stocks rebounded from last week’s sell-off and a closely watched gauge of business activity suggested that the bloc’s economy is holding up well and price pressures are rising. The Composite Purchasing Managers Index, seen as a significant indicator of economic health, fell to 59.5 in August from 60.2 last month but remained well above the 50-mark that separates growth from decline. The review also showed that supply chain disruption continued to push up firms’ costs – a development that could mean a pick-up in inflation, widely viewed as transitory by major central banks, including the ECB – could last longer than anticipated. Immediate resistance can be seen at 1.1790. A breakout up can trigger growth towards 1.1850.

BUY STOP 1.1790/TP 1.1850/SL 1.1770


USD/CAD: The Canadian dollar rose against the US dollar on Monday as higher oil prices and weaker dollar boosted the Canadian dollar across the board. Oil prices rose more than 5% after seven days of decline. Brent crude climbed to settle at $69 per barrel after touching its lowest since May 21 at $64.60 during the session. Last week, Brent marked its biggest weekly decline in more than nine months. If the price continues to rise, the Canadian dollar will receive additional support. Immediate support is seen at 1.2630, a breakout below this mark could take the pair towards 1.25.

SELL STOP 1.2610/TP 1.25/SL 1.2640


USD/JPY: The dollar declined against the Japanese yen on Monday amid the market’s risk-on mood and weak data suggesting that the Federal Reserve is unlikely to remove its monetary stimulus quickly. Now, investors are less confident that Fed Chair Jerome Powell’s speech at Jackson Hole this week will indicate the change in the quantitative easing program. The dollar index, which measures the currency’s performance against a basket of six major currencies, fell to 93. Strong support can be seen at 109.50. A breakout below could take the pair towards 109.00.

SELL STOP 109.50/TP 109.00/SL 109.70