USDCAD Bearish, USDJPY Bullish (but Correction/ Reversal Risks)


  • This has again reflected a general “risk on” theme across global asset classes from late September into early October.
  • However, a shift towards a “risk off” scenario into the second half of last week has echoed rising yields in the US (and elsewhere) and also a significant correction lower by global equity indices.
  • Although USDCAD is bearish and USDJPY bullish (intermediate-term), the very near-term risks are for corrective moves.

USDCAD Bias still higher

Another prod higher Friday to build on Thursday’s advance above 1.2888 resistance AND Wednesday’s solid rebound, further easing bear pressures from the turn of quarter plunge lower, keeping the bias higher Monday.

We see an intermediate-term bearish theme.

For Today:

  • We see an upside bias for 1.2955; break here aims for 1.3020, maybe towards 1.3082.
  • But below 1.2885 aims at 1.2853 and opens risk down to 1.2810.

Intermediate-term Outlook – Downside Risks: Whilst below 1.3226 we see a downside risk for 1.2725.

  • Lower targets would be 1.2536, 1.2250 and 1.2062/00
  • What Changes This? Above 1.3226 shifts the intermediate-term outlook straight bullish.

Resistance and Support:

1.2955 1.3020 1.3082** 1.3131 1.3198*
1.2885 1.2853* 1.2810 1.2784** 1.2738**

4 Hour USD/CAD Chart


USDJPY Downside bias

A modest setback on Friday to reinforce Thursday’s impulsive move lower through support at 113.76, failing from just below strong 2017 resistance at 114.73, still easing immediate upside forces, to keep risks lower for Monday.

The mid-September push above here 112.15 set an intermediate-term bull trend.

For Today:

  • We see a downside bias for 113.53/49 and he up trend line from early September; break here quickly aims for 113.29, then possibly towards key 112.53.
  • But above 114.10/15 opens risk up to 114.55 and maybe key 114.73.

Intermediate-term Outlook – Upside Risks: We see an upside risk for 114.73.

  • Higher targets would be 115.63 and 118.65
  • What Changes This? Below 112.53 shifts the outlook back to neutral; through 111.64 is needed for a bear theme.

Resistance and Support:

114.10/15 114.55* 114.73*** 115.00 115.63***
113.53/49** 113.29* 112.77/75* 112.53** 112.26

4 Hour USD/JPY Chart


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