US Dollar remains weak versus Yen and Australian Dollar
The US currency has retained a negative tone since late July with significant erosion across G10 currencies, but particularly against the broadly strengthening Japanese Yen.
The USDJPY plunge has shifted the intermediate-term outlook from bullish back to neutral, with growing threat for a more bearish shift for August. This would be signalled below 99.99.
Although AUUDSD is in a choppier up trend, the bias remains for a retest of the July peak at .7676 into early August and for a more bullish tone to extend for the month.
Another low level consolidation Wednesday below resistance at 101.87, to maintain negative pressurises from the Tuesday breakdown through 101.93, 101.78 and 101.59 supports and from the plunge lower Friday, to leave a bear tone again for Thursday.
Furthermore, the late July break of 103.89 signalled a shift back to a broader range theme on an intermediate-term outlook, with risk growing for a bearish shift back below 99.99.
Short/ Intermediate-term Range Parameters: We see the range defined by 99.99 and 107.49.
Range Breakout Challenge
- Upside: Above 107.49 aims higher for 107.90, 109.26 and 110.00.
- Downside: Below 99.99 sees risk lower for 99.00 and 96.57.
For Thursday/ Friday:
- We see a downside bias for 100.64/53; break here aims for key 99.99, then little to note down to the 99.00 Brexit spike low!
- But above 101.87 opens back risk up towards 102.86.
Daily USDJPY Chart
A high level consolidation Wednesday (above modest support at .7541) of the strong Tuesday rebound after the RBA rate cut decision (from .7484) to a recovery high to .7638, to leave an upside bias Thursday.
This activity has reinforced the intermediate-term bullish outlook, having rejected a shift back to a neutral (below .7403).
Short/ Intermediate-term Outlook – Upside Risks: The mid-July new recovery high above .7648 signalled an intermediate-term bullish shift .
- We see a positive tone with the bullish threat to .7676 and .7719.
- Above here targets .7835/49/78 and .8000.
What Changes This? Below .7403 signals a neutral tone, only shifting negative below .7284.
For Thursday/ Friday:
- We see an upside bias for .7638; break here aims for .7659, then the .7676 cycle peak and maybe .7719.
- But below .7541 opens risk down to .7490/84.
Daily AUDUSD Chart