EURUSD Weakness to Dominate; Additional Strength for US Stocks
EURUSD Descending Triangle | Support at 1.1300
EURUSD has been forming lower highs and finding support at the 1.1300 major psychological level, creating a descending triangle on its 1-hour forex chart. Selling pressure has increased for this pair, as the Greek government and the Eurogroup have failed to come up with a deal for the country’s debt.
Price recently came off a test of resistance and is on its way to test support. Further selling momentum could see a break of the bottom of the triangle and a longer-term selloff for EURUSD. Take note that the chart pattern is approximately 200 pips in height, which means that the resulting breakdown could be of the same size.
In that case, a move towards the 1.1100 support area could take place. The FOMC minutes this week could also be in support of the dollar since the Fed has sounded hawkish in their latest rate statement. Data from the US has supported this upbeat stance, which might mean more upside for the US currency.
The Greek government has been given until Friday this week to agree to the current bailout terms and continue to implement more austerity in the country. Should they refuse to sign this deal, they might be forced to seek funding elsewhere or exit the euro zone.
EURCAD Downtrend Channel | Headed for Support at 1.4000
EURCAD is moving inside a descending trend channel on its 1-hour chart but is currently stalling at the mid-channel area of interest. A break below the 1.4100 major psychological support level could confirm increased selling pressure and lead to a move towards the channel support at the 1.4000 mark.
A bounce off the 1.4000 channel support might mean another move towards the top of the range at 1.4200-1.4250, although this might be less likely. The euro is under increased selling pressure due to the ongoing Greek debt negotiations, with the lack of a bailout deal likely to put the region’s stability in question.
Meanwhile, Canada is waiting to release its retail sales report towards the end of the week and might show more weakness. After all, its jobs figures have come in below expectations and could lead to weaker spending data. In that case, EURCAD could have a chance at bouncing off the channel support later on.
The rebound in oil prices has provided the Loonie support recently, along with the pickup in risk appetite. Should this market environment persist, the pair could go for a strong break below channel support and push for a sharper downtrend
EBAY Shares Headed for Resistance | Top of the Range Near $58/Share
EBAY shares recently bounced off support at the simple moving averages and seems ready to make another test of the long-term range resistance near $58/share. If this still holds, another test of the nearby support around $53/share might be possible.
For now, the simple moving averages on the daily time frame are crossing back and forth, which could mean further range-bound action. The 50 SMA is above the 200 SMA for the time being, hinting at a slight possibility of an upside break from resistance and a move towards the $60/share level.
Risk appetite has picked up among US equities recently, although the upcoming release of the FOMC minutes could determine whether this might carry on or not. A hawkish statement could lead to more gains for EBAY shares as this would confirm that the US economy is faring well.
On the other hand, downbeat remarks could lead to losses among US stocks, which could pave the way for a strong downside break below the near-term support at $53/share. This seems to be a less likely scenario though since US economic data has been mostly positive.