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USDJPY and USDCAD downside threat post Fed rate hike

usdjpy chart

  • A rate hike from the Fed on Wednesday 21st March as anticipated, but an overall more cautious, dovish tone has been the takeaway, sending the US Dollar lower against major currencies.
  • For USDJPY the selloff has rejected the March basing effort and now sets risks lower within the overall bear trend.
  • The plunge lower for USDCAD has threatened the bull trend evident from February, with a shift to neutral possible, but only below 1.2801.

Read more currency forecasts

USDJPY Negative tone

A dip Wednesday Thursday from below our next 106.75 resistance (from 106.64) to reject the bounce effort Tuesday and resume negative pressures from last week’s setback through 106.22/11 supports, shifting the bias lower for Thursday.

The mid-January selloff below 112.01 produced an intermediate-term bearish shift.

For Today:

  • We see a downside bias for 105.57 and 105.43; break here aims for the cycle low at 105.25.
  • But above 106.64/75 opens risk up to 107.30, maybe 107.68.

Intermediate-term Outlook – Downside Risks:

  • Whilst below 108.00 we see a bear theme with the downside threat to 104.93,104.06 and 101.15.

What Changes This? Above 108.00 signals a neutral tone, shifting bullish below 109.31.

Resistance and Support:

106.64/75 107.30** 107.68** 107.90/108.00*** 108.51*
105.90 105.57/43* 105.25/16** 105.00/104.93*** 104.55

4 Hour USDJPY Chart

usdjpy chart

 

USDCAD Plunge and downside risks

A significant sell off Wednesday through multiple supports, the lowest being the 1.2916/13 area, rejecting the recent bull trend and shifting the threat lower for Thursday.

The latter February break above 1.2728  set a bullish intermediate-term view. BUT at risk through 1.2801.

For Today:

  • We see a downside bias for 1.2871; break here aims for 1.2827, maybe key 1.2801.
  • But above 1.2908 opens risk up to 1.2971.

Intermediate-term Outlook – Upside Risks:

  • Whilst above 1.2801 we see a positive tone with the bullish threat to 1.3347.

What Changes This? Below 1.2801 signals a neutral tone, only shifting negative below 11.2612.

Resistance and Support:

1.3076 1.3125/33* 1.3168 1.3200/03 1.3247
1.3005 1.2976 1.2940* 1.2916/13** 1.2871

4 Hour USDCAD Chart

 usdcad 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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