US Dollar Mixed Outlooks Versus CAD and JPY

usdcad chart

  • A mixed outlook for the US Dollar versus the Canadian Dollar and the Japanese Yen.
  • The US$ has generally weakened against most G10 currencies since the rate hike in December 2017, with a prominent setback through the late 2017 holiday season.
  • For USDCAD, this negative USD tone produced a breakdown below 1.2620 in late 2017, that shifted the intermediate-term theme to bearish for at least January. This was reinforced on Friday by the sell off after the US and Canadian Employment reports.
  • USDJPY, however, has seen a more positive tone since latter 2017, within a range environment, with the Yen weakening with a global “risk on” theme.
  • The skewed risk for USDJPY is for an intermediate-term bullish shift, but only confirmed above 113.75 (a more bearish intermediate-term outlook needs surrender of 112.01).

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USDCAD Bearish intermediate-term trend

A plunge lower through the US and Canadian Employment reports Friday and as we had flagged below 1.2479/73, 1. 2448, 1,2429, and 1.2413/12 supports, to sustain negative forces from the late 2017 plunge down through key 1.2620, keeping risks lower Monday.

A negative breakout from the range through 1.2620 in latter 2017 shifted the intermediate-term outlook to the downside for January.

For Today:

  • We see a downside bias for 1.2351; break here aims quickly for 1.2332 and maybe 1.2252.
  • But above 1.2455 opens risk up to 1.2513, maybe 1.2555.

 Intermediate-term Outlook – Downside Risks:

  • Whilst below 1.2796 we see a negative tone with the bearish threat to target 1.2429, possibly 1.2194 and 1.2060.

What Changes This? Above 1.2796 signals a neutral tone, only shifting positive above 1.2917.

Resistance and Support:

1.2455 1.2513** 1.2555 1.2589 1.2653*
1.2351 1.2332** 1.2300 1.2252** 1.2194**

4 Hour USDCAD Chart

usdcad chart

USDJPY Bullish threat

As expected a further rebound Friday above 113.00 to build on the recent break above resistances at 112.47/50 and 112.79, keeping the bias higher for Monday.

We still see an intermediate-term range theme into January (113.75-112.01), but with the skewed bias for a bullish shift above 113.75.

For Today:

  • We see an upside bias for 113.36; break here aims for 113.64 and maybe even the key 113.75 level.
  • But below 112.68 targets 112.46 and opens risk down to key 112.01 level; break here aims immediately for 111.97 and then 111.39.

Intermediate-term Range Parameters: We see the range defined by 113.75 and 112.01.

Range Breakout Challenge

  • Upside: Above 113.75 aims higher for 114.73, 50/63 and maybe towards the late 2016 cycle peak at 118.65.
  • Downside: Below 112.01 sees risk lower for 110.82,00, 109.53 and potentially closer to 107.29.

Resistance and Support:

113.36* 113.64* 113.75*** 113.91* 114.34**
112.68 112.46 112.03/01*** 111.39** 111.12

4 Hour USDJPY Chart

usdjpy chart

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