- The US Dollar has been gaining versus the Japanese Yen since late June with a broader “risk on” environment across global asset classes (global equity averages at multi-month highs, with US equity indices hitting record level).
- The positive outlook for the USDJPY FX rate was reinforced Friday after the strong US Employment report saw a broad strengthening of the US Dollar, with anticipation for a less dovish US Federal Reserve.
- Friday also saw the release of the Canadian Employment report and the net impact for the two reports was to see an erratic tone for the USDCAD Forex rate but retaining both short- and intermediate-term bearish themes for this currency pair.
USDJPY intermediate-term upside threat to key 108.72/80 area
A surge Friday after the US Employment report through the notable 108.51 swing peak, to reinforce our positive view from the latter June-early July sprint higher through various resistances (including the bear trend line from April) for a base, to keep risks higher into Monday.
The May surrender of 109.66 set an intermediate-term bear trend, BUT we strong risks for a move to neutral above 108.72/80.
- We see an upside bias for 108.64; break here aims for key 108.72/80, maybe 109.15.
- But below 108.02 maybe opens risk down towards 107.50.
Intermediate-term Outlook – Downside Risks: We see a downside risk for 106.72/55 and 105.00/104.78
- What Changes This? Above the resistance gap at 72/80 shifts the outlook back to neutral; above 109.92 is needed for a bull theme.
4 Hour USDJPY Chart
USDCAD: Choppy Friday leaves bias back lower
A Friday rebound failure after the US and Canadian Employment reports back from just below our initial resistance at 1.3145 (from 1.3137) to reinforce negative pressure a from last Wednesday’s plunge through 1.3053 support to another new selloff low at 1.3031, aiming lower Monday.
The June plunge through 1.3270 set an intermediate-term bearish trend.
- We see a downside bias for 1.3031; break here aims for 1.3000, maybe 1.2961.
- But above 1.3102 opens risk up to 1.3137/45
Intermediate-term Outlook – Downside Risks: We see a downside risk for 1.3064, 1.3000 and 1.2755.
What Changes This? Above key 1.3430/49 shifts the intermediate-term outlook back to neutral; above 1.3565 is needed for an intermediate-term bull theme.
4 Hour USDCAD Chart