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Euro and Yen Shifting More Bullish Versus the US Dollar

USDJPY Chart

  • 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.

For Today:

  • 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

EURUSD 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.

For Today:

  • 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.

Daily Chart

USDJPY Chart

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