- Broad US Dollar weakness into the second half of August was reinforced on Friday during the Jackson Hole speeches by both Yellen and Draghi.
- For EURUSD, the push to a new cycle high now aims at the psychological/ option target at 1.2000.
- For USDJPY, the mid-August breach of 108.89 signals potential for further losses into September.
EURUSD – Bullish trend reinforced
As anticipated a bullish extension on Friday through the August peak at 1.1910, reinforcing the intermediate-term bullish outlook and also setting the risk higher again form Monday.
- We see an upside bias through 1.1941 to challenge the psychological/option target at 1.2000, maybe closer to 1.2063.
- But below 1.1864 opens correction risk down towards 1.1772.
Intermediate-term Outlook – Upside Risks:
- We see a positive tone with the bullish threat to 1.2000, 1.2173, maybe closer to 1.2600/02.
What Changes This? Below 1.1661 signals a neutral tone, only shifting negative below 1.1603.
4 Hour Chart
USDJPY – Bearish threat (but initial rebound risks)
A probe above our 109.83 resistance on Friday and despite the subsequent setback we still see a basing attempt and risk to the upside for Monday.
However, the mid-August probe below 108.89 produced an intermediate-term bearish shift.
- We see an upside bias for 109.83/84; break here aims for 11 0.37.
- But below 108.81 opens risk down to 108.56 and 108.10.
Intermediate-term Outlook – Downside Risks:
- We see a negative tone with the bearish threat to 108.10.
- Below here targets 107.19 and 105.99.
What Changes This? Above 111.05 signals a neutral tone, only shifting positive above 114.50.
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