Despite the weaker Dollar, the individual Forex markets stayed within their June to July ranges and all merely mounted percentage retracements of these ranges.

Traders pressured the GBP USD late in the week following a retracement to 1.6452. The main trend is down and this week’s rally and subsequent break may be signaling that a secondary top is forming.

The EUR USD closed flat on Friday but up for the week. A new higher bottom has been formed at 1.3832 but the inability to take out the recent swing top at 1.4201 is still providing a reason to think that this pair is topping.

The USD JPY posted a reversal bottom this week on the daily chart at 91.73. Although the trend is down, the follow-through to the upside indicates that the buying may be greater than the selling at current levels. The weekly reversal up is an even stronger sign that higher prices are coming. A trade through 94.46 will confirm the weekly reversal bottom and could trigger a rally to 96.80.

Despite closing lower in limited trading on Friday, the AUD USD finished the weekly session in a position to challenge the high for the year at 82.64. A strong rally in the equity markets next week will most likely encourage more buying in the Australian Dollar.

Like the Aussie Dollar, the Kiwi or New Zealand Dollar is in a position to make a new high for the year. This market is moving almost lock-step with the stock market. A strong surge in equities next week could launch this currency pair through .6590.

The USD CAD plunged sharply lower this week led by higher oil and equity prices. Currently this currency pair is having trouble with a retracement level at 1.1142. A close below this level could fuel a fast break to the low for the year at 1.0783.

The Bank of Canada meets on July 21. The results of this meeting should provide short-term direction for this currency pair. Traders will be looking for news regarding financial stimulus. Since May the BoC has taken a “wait-and-see” stance on the economy.

The biggest issue facing the Canadian economy at this time is the rapid appreciation in the Canadian Dollar since March. The BoC has tried to talk this currency down out of fear that a high priced Canadian Dollar would cause buyers to back away from exports. Recently the force driving this currency higher has been demand for higher-risk assets.

There is really nothing the BoC can do about the rise in the U.S. equity markets, but it may attempt to pressure the Canadian Dollar by applying quantitative easing or announcing another stimulus plan both of which add more money to the economy. Any one of these actions could weaken the currency and trigger a USD CAD rally.