USD/CAD Bull Flag Aims Above 1.1240, EUR/USD Flirts with 1.3200

By DailyFx | Updated August 26, 2014 AAA

DailyFX.com -

Talking Points:

- EURUSD could squeeze to 1.3335.

- USDCAD flag points to 1.1241, wedge to 1.1278.

- US Dollar strength in August shouldn't surprise - it's a seasonally strong month.

The Jackson Hole conference last week paved the way to a more hawkish than expected Federal Reserve Chair Janet Yellen and a more dovish than expected European Central Bank President Mario Draghi, keeping EURUSD under pressure near $1.3200 in its immediate aftermath.

The US Dollar's overall run has been quite impressive, considering it has done so by and large without the benefit of stronger US yields serving as a tailwind. Yet with long-end US Treasury yields hanging near their lowest levels in a year, traders may find a reason to sell the greenback should one or two things go wrong.

There are two events on the calendar today that need to go right for the US Dollar in order for it to keep its bull run going. US Durable Goods Orders (JUL) and US Consumer Confidence (AUG) are arguably the two most important US economic data releases this week, and without strong figures, the US Dollar's overbought conditions could lead to a short-term pullback.

See the DailyFX US Dollar Economic Calendar for Tuesday, August 26, 2014.

Nevertheless, as long as EURUSD remains below $1.3335 over the coming days then the May-July downtrend will remain intact, as will the former support from early-August. USDCAD may be consolidating in a bull flag complemented by a falling wedge, pointing to targets just short of C$1.1300.

See the above video for technical considerations in EURUSD, USDCAD, USDCHF, USDJPY, and AUDUSD.

Read more: USDOLLAR in at 6-Month High after Jackson Hole; USD/CHF Hits Target

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