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US Dollar Rallies with Trade War “Risk Off”; Canadian Dollar Falters with NAFTA

usdcad chart

  • General US Dollar strength from late August has reflected ongoing trade war and emerging markets tensions, whilst the Canadian Dollar has suffered as the North American Free Trade Agreement (NAFTA) talks have faltered.
  • The intermediate-term USDCAD bearish currency view from late July is being questioned by the surge higher from late August and above 1.3290 would see our intermediate-term technical view shift from bearish to bullish.
  • For the USDJPY FX rate, the recent push higher also questions our underlying, intermediate-term bearish view, with a push above 112.15 needed to shift the outlook straight to a bull theme.

USDCAD Bullish risk

A surge higher Tuesday as we had flagged through 1.3160, 1.3176 and 1.3191 key resistance peaks to build on Monday’s firm advance through 1.3103 swing resistance and the down trend line from June, to keep risks higher for Wednesday.

We see an intermediate-term bearish theme, BUT risk is growing for an intermediate-term shift to bullish above 1.3290.

For Today:

  • We see an upside bias through 1.3112 for 1.3160 and 1.3176; break here aims for 1.3191, maybe 1.3247.
  • But below 1.3105 opens risk down to 11.3037.

Intermediate-term Outlook – Downside Risks: Whilst below 1.3290 we see a downside risk for 1.2814.

  • Lower targets would be 1.2725 and 1.2536
  • What Changes This? Above 1.3290 shifts the intermediate-term outlook straight to a bull theme.

Resistance and Support:

1.3208 1.3247* 1.3290*** 1.3351* 1.3382/86***
1.3105 1.3037* 1.2961 1.2915 1.2883*

4 Hour USDCAD Chart

 usdcad chart

 

USDJPY Positive bias

A rebound Tuesday above 111.40 resistance, to ease negative pressures from the late August selloff from 111.83, to shift risks higher into Wednesday.

The mid-August surrender of 110.25 set an intermediate-term bear trend.

For Today:

  • We see an upside bias for 111.71; break here aims for 111.83/88, maybe towards key 112.15.
  • But below 111.03 opens risk down to 110.66, maybe towards 110.19 and 110.00.

Intermediate-term Outlook – Downside Risks: We see a downside risk for 109.35.

  • Lower targets would be 108.08, 106.88 and maybe 104.54
  • What Changes This? Above 112.15 shifts the outlook straight back to a bull theme.

Resistance and Support:

111.71 111.83/88** 112.15*** 112.55/60* 113.14/18**
110.66 110.19 110.00* 109.74** 109.35**

4 Hour USDJPY Chart

 usdjpy chart

 

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