US Dollar Strength Extension; USDJPY and USDCAD

usdjpy chart

  • The USD has resumed its stronger tone since mid-October, reinforcing a strengthening that has developed through September-October.
  • This has been a reaction to a still strengthening US economy and anticipation of a more hawkish FOMC, despite ongoing concerns regarding the lack of inflation.
  • For USDJPY, this leaves an up trend intact, to next aim for 114.50.
  • For USDCAD, the threat is to key upside levels at 1.2663 and 1.2778.

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USDJPY – Bullish threat

A strong recovery effort on Friday to reject Thursday’s plunge back lower from ahead of the October peak at 113.44, with the Friday push up through this level re-energising the intermediate-term bullish theme and setting the short-term upside bias for Monday.

The late September push through 112.20 produced a bullish shift in the intermediate-term outlook.

For Today:

l We see an upside bias for 113.58; break here aims for 113.74, 114.12, maybe even a key target at 114.50.

l But below 113.05 opens risk down to 112.53.

Intermediate-term Outlook – Upside Risks:

l We see a positive tone with the bullish threat to 114.50

l Above here targets 115.50/63 and maybe towards 118.65.

What Changes This? Below 111.45 signals a neutral tone, only shifting negative below 109.53.

4 Hour USDJPY Chart

usdjpy chart

USDCAD – Rebound bias

A strong recovery effort Friday as we had anticipated through resistance at 1.2534 and the 1.2591/99 area, rebounding last week from the trendline support from early September and above chart support at 1.2429, keeping the threat to the upside Monday.

Furthermore, we still see October threat for a shift in the intermediate-term bearish view to neutral, BUT only above 1.2663, maybe even as high as 1.2778, which would see an intermediate term bullish switch.

For Today:

l We see an upside bias for key 1.2663; a break above here quickly targets 1.2691, maybe up towards critical 1.2778

l But below 1.2567 opens risk down to 1.2473.

Intermediate-term Outlook – Downside Risks:

l Whilst below 1.2663, we see a negative tone with the bearish threat to targets 1.2000 and 1.1919.

What Changes This? Above 1.2663 signals a neutral tone, only shifting positive above 1.2778.

Daily USDCAD Chart

usdcad chart


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