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US Dollar Mixed Outlooks Versus CAD and JPY

usdcad chart

  • A mixed outlook for the US Dollar versus the Canadian Dollar and the Japanese Yen.
  • The US$ has generally weakened against most G10 currencies since the rate hike in December 2017, with a prominent setback through the late 2017 holiday season.
  • For USDCAD, this negative USD tone produced a breakdown below 1.2620 in late 2017, that shifted the intermediate-term theme to bearish for at least January. This was reinforced on Friday by the sell off after the US and Canadian Employment reports.
  • USDJPY, however, has seen a more positive tone since latter 2017, within a range environment, with the Yen weakening with a global “risk on” theme.
  • The skewed risk for USDJPY is for an intermediate-term bullish shift, but only confirmed above 113.75 (a more bearish intermediate-term outlook needs surrender of 112.01).

Read more forex market analysis

USDCAD Bearish intermediate-term trend

A plunge lower through the US and Canadian Employment reports Friday and as we had flagged below 1.2479/73, 1. 2448, 1,2429, and 1.2413/12 supports, to sustain negative forces from the late 2017 plunge down through key 1.2620, keeping risks lower Monday.

A negative breakout from the range through 1.2620 in latter 2017 shifted the intermediate-term outlook to the downside for January.

For Today:

  • We see a downside bias for 1.2351; break here aims quickly for 1.2332 and maybe 1.2252.
  • But above 1.2455 opens risk up to 1.2513, maybe 1.2555.

 Intermediate-term Outlook – Downside Risks:

  • Whilst below 1.2796 we see a negative tone with the bearish threat to target 1.2429, possibly 1.2194 and 1.2060.

What Changes This? Above 1.2796 signals a neutral tone, only shifting positive above 1.2917.

Resistance and Support:

1.2455 1.2513** 1.2555 1.2589 1.2653*
1.2351 1.2332** 1.2300 1.2252** 1.2194**

4 Hour USDCAD Chart

usdcad chart

USDJPY Bullish threat

As expected a further rebound Friday above 113.00 to build on the recent break above resistances at 112.47/50 and 112.79, keeping the bias higher for Monday.

We still see an intermediate-term range theme into January (113.75-112.01), but with the skewed bias for a bullish shift above 113.75.

For Today:

  • We see an upside bias for 113.36; break here aims for 113.64 and maybe even the key 113.75 level.
  • But below 112.68 targets 112.46 and opens risk down to key 112.01 level; break here aims immediately for 111.97 and then 111.39.

Intermediate-term Range Parameters: We see the range defined by 113.75 and 112.01.

Range Breakout Challenge

  • Upside: Above 113.75 aims higher for 114.73, 50/63 and maybe towards the late 2016 cycle peak at 118.65.
  • Downside: Below 112.01 sees risk lower for 110.82,00, 109.53 and potentially closer to 107.29.

Resistance and Support:

113.36* 113.64* 113.75*** 113.91* 114.34**
112.68 112.46 112.03/01*** 111.39** 111.12

4 Hour USDJPY Chart

usdjpy chart

Risk Statement: Trading Foreign Exchange on margin carries a high level of risk and may not be suitable for all investors. The possibility exists that you could lose more than your initial deposit. The high degree of leverage can work against you as well as for you.


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