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USDCAD fades lower with a shift to “risk on” as USDJPY shifts bullish

usdcad chart

  • An improving backdrop to the US-Sino trade war has seen global asset classes shift towards more of a “risk on” environment, which has seen broader US Dollar weakness, BUT then an even weaker Japanese Yen.
  • The USDCAD currency intermediate-term bearish view has been reinforced by the recent selloff into mid-September, down from below a key resistance at 1.3290, sustaining the intermediate-term bearish theme into late Q3.
  • With respect to the USDJPY Forex rate, the shift to “risk on” has allowed for a probe above key 112.15, to shift the intermediate-term outlook from bearish straight to bullish.

USDCAD Negative theme intact

A rebound Friday but whilst contained by 1/3078 resistance we still see downside pressures from the Tuesday-Thursday plunge lower through numerous supports, keeping risks lower Monday.

We see an intermediate-term bearish theme.

For Today:

  • We see a downside bias for 1.2983 and 1.2971/61; break here aims for 1.2915 and key support at 1.2883.
  • But above 1.3046 aims for 1.3078 and maybe opens risk up to 1.3131.

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 bullish.

Resistance and Support:

1.3078 1.3131 1.3198* 1.3226* 1.3290***
1.2983/71/61 1.2915 1.2883** 1.2855** 1.2814**

4 Hour USDCAD Chart

 usdcad chart

 

USDJPY Intermediate-term bull shift above 112.15

We have stressed in September reports that “growing risk is for an intermediate-term shift to bullish above 112.15” and the Friday push above here sets an intermediate-term bull trend.

This positive price action also sets risks higher into Monday.

For Today:

  • We see an upside bias for 112.17, above aims towards the 112.55/60 area, possibly closer to the key 113.14/18 cycle peaks.
  • But below 111.73 opens risk down to 111.35 and maybe towards 111.09/01.

Intermediate-term Outlook – Upside Risks: We see an upside risk for xxxx.

  • Higher targets would be xxxxxxxx, xxxxx and xxxxxx
  • What Changes This? Below xxxxx shifts the outlook back to neutral; through xxxxxx is needed for a bear theme.

Resistance and Support:

112.17 112.55/60* 113.14/18** 113.55 114.00/03
111.73* 111.35 111.09/01** 110.71 110.36**

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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