Originally published by AxiTrader
EUR/USD hasn't been the most exciting currency pair to trade in the past few weeks. However, there was a big jump in volatility following Mario Draghi's speech today and EUR/USD rallied to almost 1.1350. The technical outlook has now turned from neutral to positive. The euro showed a lot of resilience prior to this breakout, and speculators are likely to look again for long opportunities. CFTC data shows that the EUR long trade is still far away from being crowded.
What levels should EUR/USD traders keep an eye on? Immediate support can be expected in the former resistance area between 1.1288 and 1.1298. Strong support then lies between 1.1210 and 1.1220 - which acted as major resistance levels prior to the breakout.
To the topside - following the break above 1.13, the next major resistance level lies at 1.1430 (May 2016 high).
USD/JPY is holding surprisingly well despite the broad US dollar weakness and weak performance of equity markets. The topside was capped at 112.50 earlier today. While the charts suggest that further gains are ahead, keep an eye on the major stock indices. If the Nikkei comes under pressure, USD/JPY will likely follow it lower. Key support is seen at 111.45/50. A break below would signal that another pullback towards 110.65 is likely.
USD/CAD broke below a significant support level at 1.3165. The daily RSI is showing that the currency pair is not in oversold territory yet. The charts clearly suggest that further losses are ahead, and there will likely be decent selling interest around 1.3220 and again at 1.3260. To the downside, the next major area of support now lies between 1.30 and 1.3020.
The outlook for WTI remains bearish. It tested the major resistance level at $44.20 (former key support), but failed to breach it clearly. The reversal suggests that WTI is likely to retest $42 in the near-term.
S&P 500 is approaching support at 2415. A clear break below that level could accelerate momentum, and pave the way for a retracement to at least 2400 (near the 55 DMA).