Dollar pulls back against its major rivals on U.S.-China trade optimism

The relative value of the New Zealand dollar and the Australian Dollar showed the greatest rise and fall respectively during the last week. Fundamental analysts believe there will be no more cuts for a while after the Fed’s quarter-point rate cut last month. Jerome Powell supports this opinion, having a rather positive opinion on current US economy.
Reserve Bank of New Zealand decided to cut its interest rate too, which made the Forex market put a greater focus on the US dollar and the New Zealand dollar. This week is finally going to be refreshed by some macroeconomic events.

Last week a bullish candlestick on the S&P chart was very close to its all-time high at the session’s closing. These bullish signs indicate that the price may rise further during the next week.
Technically speaking, the USDJPY pair is neutral yet its downside potential is limited. On the daily chart, the pair has stucked around the 20th moving average.

Indicators show their midlines. Especially, the Cayman indicator, which shows there is 45% of buyers on the market. On the 4-hour chart, the pair is around the 20th and 100th moving averages, while the RSI oscillator has recovered from oversold levels but lost momentum near its midlines. The pair could have more chances of growing through the strong resistance 109 after a couple of pullbacks.
USD/CAD reached a 1-month high but then retracted and showed little change over the week.

This week features Canadian inflation and retail sales reports. The Canadian dollar gained some points, having recovered its losses in the middle of the last week. There are indications that the U.S. and China are close to reaching a limited trade deal, and if they really are, we’re supposed to see an improvement in risky instruments, which would be a bullish signal for the Canadian dollar.
However, if we speak from a technical point of view, then it’s worth buying USDCAD in the short or middle term from current levels because the Cayman indicator stays around oversold levels. The closest support is located at the 1.3195 mark and we are going to set a buy limit at this level as well.

To sum up, here are our targets for:
S&P500 – buy up to 3140
USDJPY – set a buy stop at 109.20
USDCAD – buy up to 1.33 and set a buy limit at 1.3195
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