In its technical FX charts of the week, Morgan Stanley provides some insights on the key levels in AUD/USD, EUR/USD, and USD/CAD.
"AUD/USD breaking above 0.72 this week has brought it back into the trend channel formed since August 2015 and opened room for further upside. The pair will find resistance in the consolidation area around 0.74, then at 0.76, which is the upper end of the channel. This is a tactical rebound, which hasn’t formed an impulsive sub-structure. The RSI doesn’t suggest any signs of being overbought.
EURUSD may also see some further upside, after the break of 1.0960. Extending the trend channel from March 2015 suggests that the lower end of the channel is around 1.1430. EURUSD could find it difficult to move above the August high of 1.1714. Our tracker suggests that the market is fairly neutrally positioned on EUR.
The USDCAD retracement is almost over, we believe. Looking at the technicals, the pair has almost reached the 61.8% retracement level at 1.3542 of the move since October. We use the dip to buy. However, USDCAD is in the middle of a longer-term channel. Should it break lower then levels to watch to the downside are a break of 1.345, the September high, and then 1.2382, the next low," MS clarifies.
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