US Dollar Weakening, Aiming Both USDJPY and USDCAD Lower

usdjpy chart

  • As we previously highlighted, the strong US dollar that was seen in October has been replaced by a slowly weakening US$ theme throughout November.
  • USDJPY FX has shifted from a small topping pattern, to a more significant top and more bearish tone, aiming lower for late November and into year-end.
  • Although the short-term USDCAD is negative for a further correction lower, the intermediate-term outlook remains bullish, for now.


USDJPY Intermediate-term bearish shift

We have stressed in recent reports that “the growing threat is for surrender of 111.63 for a still bigger top and an intermediate-term bearish shift” and the plunge through here highlights a more negative theme into latter November and December.

Furthermore, the surrender of 111.63 sustains the bear bias into Thursday/ Friday.

For Today:

  • We see a downside bias to 111.00 and 110.75, maybe 110.32.
  • But above 112.18 opens risk up to 112.69/72 area.

Intermediate-term Outlook – Downside Risks:

  • We see a negative tone with the bearish threat to 110.00.
  • Below here targets 109.53 and maybe 107.29.
  • What Changes This? Above 113.33 signals a neutral tone, only shifting positive above 114.73

Resistance and Support:

112.18 112.69/72** 113.33*** 113.91** 114.34*
111.45 111.10* 110.75 110.32 110.00**

4 Hour USDJPY Chart

usdjpy chart

USDCAD Downside shift

A significant (and unexpected) setback Wednesday, rejecting the rally from mid-November. Through supports at 1.2737 and to probe 1.2696, shifting the risks lower for Thursday.

The late October surge after the Bank of Canada Meeting above key resistance at 1.2778

shifted the intermediate term outlook to bullish.

For Today:

  • We see risks lower for 1.2662; break here aims for 1.2632, maybe 1.2609.
  • But above 1.2765 targets 1.2824/35.

Intermediate-term Outlook – Upside Risks:

  • We see a positive tone with the bullish threat to 1.3015.
  • Above here targets 1.3347 and 1.3550.
  • What Changes This? Below 1.2429 signals a neutral tone, only shifting negative below 1.2194.

Resistance and Support:

1.2765 1.2824/35** 1.2915/17** 1.2930/33 1.3000/15**
1.2662** 1.2632** 1.2609* 1.2567 1.2500

4 Hour USDCAD Chart

 usdcad chart

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