- We last reviewed the USDJPY and USDCAD currency pairs here and highlighted an indecisive theme for USDJPY and both short- and intermediate-term positive themes for USDCAD.
- A broadly weakening US Dollar into early June after a sprint lower in US Treasury yields and a more dovish tone from the Federal Reserve, namely Chairman Jerome Powell has sent both USDJPY and USDCAD Forex rates lower.
- This leaves USDJPY vulnerable to ongoing bear forces in a bear trend into June, whist for the USDCAD FX rate we see risk to key 1.3351, through which would see the intermediate-term bull trend switch to neutral (through 1.3270 is needed for a bearish shift).
USDJPY downside risks
A low-level consolidation Wednesday capped by resistance at 108.45/48, to leave negative forces from Tuesday’s push through a notable support at 107.97 PLUS from Friday’s aggressive selloff through multiple supports including the key 108.47 level from February 2019, keeping the bias lower into Thursday.
The May surrender of 109.66 set an intermediate-term bear trend
- We see a downside bias for 107.79/74; break here aims for 107.10.
- But above 108.45/48 opens risk up to 108.93, maybe towards 109.59.
Intermediate-term Outlook – Downside Risks: We see a downside risk for 107.74, 106.72/55 and 105.00/104.78
- What Changes This? Above the resistance gap at 109.92 shifts the outlook back to neutral; above 110.67 is needed for a bull theme.
4 Hour Chart
USDCAD bias remains lower for key 1.3351
A selloff and bounce Wednesday but whilst capped by 1/3449 resistance we still see downside forces from Tuesday’s plunge through 1.3424 and 1.3385/80 supports after Monday’s significant setback, to keep risks lower for Thursday.
The early March surge through 1.3375 set an intermediate-term bull trend, BUT with risks growing for an intermediate-term shift to neutral below 1.3351
- We see a downside bias for 1.3380 and key 1.3351; break here aims for 1.333, maybe towards 1.3300.
- But above 1.3449 opens risk up to 1.3525.
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 1.3351 shifts the outlook back to neutral; through 1.3270 is needed for a bear theme.
4 Hour Chart