Buy CAD, Euro near critical points

Markets were nervous today despite all positive news coming from the US. ISM and pending homes sales both surprised to the upside but after initial knee jerk reaction risk trades were sold off. Equities closed on the positive side but during the day there were many large moves both to the upside and to the downside.

USD index still looks good and if we hold 75.95 - 76 level there is a good chance that we will break to the upside forming a flagpole. It seems that inverted head and shoulder is being formed and upside break would target 77.30 area.

Gold is looking very well. It held a horizontal resistance turned support trendline, bounced off upward sloping channel line and it looks poised for another move higher. Only break below 1025 would turn biad down and that seem highly improbable now.

In currencies I'd like to point out a great CAD long opportunity. USDCAD daily has a nice downward sloping trendline that should provide strong selling pressure. Short positions are targetting 1.0630 the least and bias would turn up only if we break above 1.0845. EURCAD daily has a similar set up with clearly defined trendline.

EURUSD is very close to two critical points: bullish break of 1.4850 would signal resumption of a bullish move that would target 1.51 and bearish break of 1.4670 would signal that head and shoulders may be developing with neckline in 1.45 area. Buy stop and sell stop at these two areas with 50 pip stop loss and 150 pip limit make sense and provide excellent risk/reward ratio.