- The USD has resumed its stronger tone since mid-October, reinforcing a strengthening that has developed through September-October.
- This has been a reaction to a still strengthening US economy and anticipation of a more hawkish FOMC, despite ongoing concerns regarding the lack of inflation.
- For USDJPY, this leaves an up trend intact, to next aim for 114.50.
- For USDCAD, the threat is to key upside levels at 1.2663 and 1.2778.
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USDJPY – Bullish threat
A strong recovery effort on Friday to reject Thursday’s plunge back lower from ahead of the October peak at 113.44, with the Friday push up through this level re-energising the intermediate-term bullish theme and setting the short-term upside bias for Monday.
The late September push through 112.20 produced a bullish shift in the intermediate-term outlook.
l We see an upside bias for 113.58; break here aims for 113.74, 114.12, maybe even a key target at 114.50.
l But below 113.05 opens risk down to 112.53.
Intermediate-term Outlook – Upside Risks:
l We see a positive tone with the bullish threat to 114.50
l Above here targets 115.50/63 and maybe towards 118.65.
What Changes This? Below 111.45 signals a neutral tone, only shifting negative below 109.53.
4 Hour USDJPY Chart
USDCAD – Rebound bias
A strong recovery effort Friday as we had anticipated through resistance at 1.2534 and the 1.2591/99 area, rebounding last week from the trendline support from early September and above chart support at 1.2429, keeping the threat to the upside Monday.
Furthermore, we still see October threat for a shift in the intermediate-term bearish view to neutral, BUT only above 1.2663, maybe even as high as 1.2778, which would see an intermediate term bullish switch.
l We see an upside bias for key 1.2663; a break above here quickly targets 1.2691, maybe up towards critical 1.2778
l But below 1.2567 opens risk down to 1.2473.
Intermediate-term Outlook – Downside Risks:
l Whilst below 1.2663, we see a negative tone with the bearish threat to targets 1.2000 and 1.1919.
What Changes This? Above 1.2663 signals a neutral tone, only shifting positive above 1.2778.
Daily USDCAD Chart