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USDJPY and USDCAD both aim higher short-term

USDCAD Chart 2019-05-23

  • The US Dollar has broadly stayed strong during May against the major global currencies (and also Emerging Markets currencies) with a “risk off” theme continuing to dominate most global financial markets.
  • Although USDJPY was initially weaker for the first half of May due to Japanese safe haven strength, the USDJPY FX rate rebound from mid-month has reflected a more indecisive phase for global financial assets.
  • USDCAD stays somewhat indecisive in a choppy, May range, but holds onto both short- and intermediate-term positive themes.

USDJPY setback, but bias stays higher

A small setback Wednesday from exactly the bottom of our 110.67/73 resistance zone, but whilst holding above 110.04 support sustaining positive forces from this week’s strong advance and the whole rally since the mid-May rebound from 108.99 swing support, keeping the bias higher Thursday.

The May surrender of 109.66 set an intermediate-term bear trend, BUT risk is growing for a shift back to neutral above the key bear gap at 110.95-111.04

For Today:

  • We see an upside bias for 110.67/73; break here aims towards the key bear gap at 110.95-111.04.
  • But below 110.04 quickly aims for 109.78 and maybe opens risk down to 109.47.

Intermediate-term Outlook – Downside Risks: We see a downside risk for 108.47.

  • Lower targets would be 107.74 and 106.72/55.
  • What Changes This? Above the resistance gap at 110.95-111.04 shifts the outlook back to neutral; above 112.40 is needed for a bull theme.

Resistance and Support:

110.67/73* 110.95-111.04*** 111.70** 112.03* 112.40***
110.04 109.78 109.47* 109.31 108.99**

4 Hour Chart

USDJPY Chart 2019-05-23

USDCAD hanging onto a positive tone

A spike lower and a strong rebound Wednesday from below 1.3394/89 aims for 1.3374/71 supports, from 1.3351, to hang onto positive pressures from the mid-May rebound from above the 1.3374/71 support area to 1.3513, to keep risks higher for Thursday.

The early March surge through 1.3375 set an intermediate-term bull trend.

For Today:

  • We see an upside bias for 1.3483/85; break here aims for 1.3513/21.
  • But below 1.3385/80 aims for 1.3351 and maybe 1.3331.

Intermediate-term Outlook – Upside Risks: We see an upside risk for 1.3665.

  • Higher targets would be 1.3794 and 1.4000.
  • What Changes This? Below 1.3246 shifts the outlook back to neutral; through 1.3110 is needed for a bear theme.

Resistance and Support:

1.3483/85 1.3513/21* 1.3567 1.3618* 1.3665***
1.3385/80 1.3351* 1.3331 1.3270* 1.3246***

4 Hour Chart

USDCAD Chart 2019-05-23

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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