MARKET FIX 18/07/2022

Following a test of the upper boundary and resistance, we are seeing some rejection which could see the DXY head for a correction and test of the MR1 @ 106.2. The trend remains bullish in the medium term so we are only expecting this to be a short term correction.
Last week saw price reach our stretch target being reached at the MR2 and the more likely scenario would now be a small pullback and correction to test the MR1 @ 16.77. Failure of this support level could see a deeper correction to the Daily 50 SMA @ 16.11
Following EUR parity with the USD, we are seeing some bullish price action which could be indicative of a correction in line with what we also see in the DXY chart. The correction is expected to target the MS1 @ 1.029 with the possibility of a test of the upper boundary near the Daily 50 SMA also possible @ 1.043
As it turns out we did end up seeing a lower test to 0.841 as we mentioned could be the case last week. However, following this ‘last’ low we have had some bullish price action which could see a recovery of the EURGBP to around 0.853 which is also the Daily 50 SMA. Failure at any point will likely see another test of last week’s low.
Following a test of major support from the MS1 and the lower diagonal boundary, price is now facing a big test of the important YS1 pivot @ 0.683. If price can overcome this level we will likely see a test of the monthly pivot @ 0.700 with the YS1 becomming support going forward.
USDCAD continues to trade within the bullish channel following a test and rejection of the upper boundary last week. While there is still support in the upper half of the channel @ 1.289 which is the convergence level of the Daily 50 SMA and WS1 a break lower could see a test of support somewhere in the lower half of the channel.
Last week we called for close observation of price action at the YR2 resistance level @ 0.983 as this level coincides with the 61.8 Fibonacci retracement level. This effectively means rejection here could see a bearish reversal back to the lower boundary. So for this week we will look for a test of the MP @ 0.969 followed by a test of the Daily 100 SMA @ 0.960
I am still expecting more downside with a test of major support from the YS1 @ 1682 the highest probability scenario considering the recent bearish break below long term support. Once this level has been tested we could look for a bullish correction to 1750.
Following a bearish break and re-test of major support @ 108, we were expecting a measured bearish move to around the ~ 90 level. However, it seems that we found some support from the Daily 200 SMA last week and the question now remain whether we will see bullish follow through or perhaps another sell-off with price testing major support from the YR1 @ 93.00
With price action still edging sideways in a tight slightly upwards angle the possibility of another bearish flag similar to the one we saw between 10-May and 10-Jun firmly remains. In this scenario we would expect a rejection of the upper boundary @ 23280 which is both the Daily 50 SMA and Monthly Pivot. Ultimately a break of the lower boundary (below 19600) will trigger the bearish move to 14k that we have been expecting.