- A significant negative correction for USDJPY this week with a broader market “risk off” move across asset classes, driven by concerns regarding the US-North Korea Summit plus Emerging Markets weakness after the aggressive sell off on the Turkish Lira.
- However, the US$ has sustained bullish pressures from the intermediate-term rally from mid-April against the Euro and GBP, and is trying to re-energize the bull theme against the Canadian Dollar.
- In our last report, we focussed on the USDCAD intermediate-term bullish shift above 1.2944, which we look to resume into latter May and beyond.
- Despite a notable USDJPY setback in latter May, we still see the bullish intermediate-term trend as intact.
USDJPY Bull theme damaged, but looking for a bounce
A plunge lower Wednesday with an overall “risk off” move, through multiple supports from mid-May (lowest being 109.79), but then a rebound from 109.54 and despite the damage inflicted to the bull trend, we look for a rebound Thursday.
The latter April push above 107.90 set an intermediate-term bull trend.
For Today:
- Whilst above 109.12 we see an upside bias for 110.55 and maybe towards 111.08.
- But below 109.12 quickly targets the key 108.73/62 area.
Intermediate-term Outlook – Upside Risks: We see an upside risk for 111.48.
- Higher targets would be 113.75 and 114.73 maybe 115.50/63.
- What Changes This? Below 108.62 shifts the intermediate-term outlook straight from bullish to bearish.
Resistance and Support:
| 110.55 | 111.08* | 111.40/48*** | 111.88 | 112.06 |
| 109.30 | 109.12** | 108.73* | 108.62*** | 108.52 |
4 Hour USDJPY Chart
USDCAD Rebound bias
A push still higher Wednesday as expected through 1.2885 resistance, building on Tuesday’s solid bounce from above 1.2725 support (off of 1.2738), retaining upside pressures from the mid-May defence of the 1.2725 level, leaving risk for a further advance Thursday.
The early May break above 1.2944 sets an intermediate-term bull trend.
For Today:
- We see an upside for 1.2916 and 1.2925; above opens risk up towards 1.2975 and 1.2998/1.3000.
- But below 1.2803 targets 1.2738/2725 and maybe aims for 1.2714.
Intermediate-term Outlook – Upside Risks: We see an upside risk for 1.3125.
- Higher targets would be 1.3347.
- What Changes This? Below 1.2536 shifts the outlook straight to a bear trend.
Resistance and Support:
| 1.2916 | 1.2925* | 1.2975** | 1.2998/3000** | 1.3055* |
| 1.2821 | 1.2803 | 1.2738/25** | 1.2714 | 1.2629** |
4 Hour USDCAD Chart
