US Dollar weakens versus both Yen and Canadian Dollar


  • Broad US dollar weakness has resurfaced into early September in reaction to both more dovish statements by Fed officials.
  • Furthermore, USDJPY remains on its downward path also reinforced by a flight to quality in light of geopolitical tensions, encouraging a stronger Japanese Yen.
  • USDCAD is also falling, with the recovering oil price assisting Canadian Dollar strength alongside another rate hike from the Bank of Canada in early September.

Read more forecasts for major currency pairs

USDJPY – Bearish trend re-energised

A significant sell off Friday through the 108.25 and 108.10 cycle lows plus psychological/ option level at 108.00, reinforcing intermediate-term negative pressures, aiming lower into Monday.

The mid-August probe below 108.89 produced an intermediate-term bearish shift, but risk is now for a push back above 111.05 for a move back to a broader, neutral range theme.

For Today:

l We see a downside bias for 107.29; break here aims for a key retracement level at 107.19, then towards 106.55.

l But above 108.49 opens risk up to 108.97

Intermediate-term Outlook – Downside Risks:

l Whilst below 111.05, we see a negative tone with the bearish threat to 107.19 and 105.99.

What Changes This? Above 111.05 signals a neutral tone, only shifting positive above 114.50.

Daily USDJPY Chart

usdjpy chart

USDCAD – Bearish trend re-energised

Despite a bounce effort Friday, whilst below 1.2191 we see bearish pressures from the Thursday breakdown to another new cycle low and aggressive plunge Wednesday after the Bank of Canada interest rate hike, keeping the threat lower for Monday.

Furthermore, early September negative price action has reinforced the intermediate term bearish theme.

For Today:

l We see a downside bias for 1.2060; break here aims for the psychological/option level at 1.2000, maybe closer to 1.1953.

l But above 1.2191 opens risk up to 1.2244.

Intermediate-term Outlook – Downside Risks:

l We see a negative tone with the bearish threat to targets 1.2000 and 1.1919.

What Changes This? Above 1.2778 signals a neutral tone, only shifting positive above 1.3015.

Daily USDCAD Chart

usdcad chart

 

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