- Ongoing US Dollar weakness continues to impact on both the USDJPY USDCAD Forex rates.
- The May “risk off” phase has extended into June in the FX space, with a more dovish tone from Federal Reserve Speakers keeping the US Dollar weak, whilst this has encouraged global equity markets to rebound.
- The USDJPY continues to extend lower through early 2019 supports
- The USDCAD FX rate has plunged lower in early June through a key 1.3270 level, to shift the intermediate-term outlook to bearish.
USDJPY immediate downside risks intact
An erratic Friday through the US Employment report, but a poke above 109.49 to then see a failure back lower from below the 108.93 resistance (from 108.62) sustains negative forces from the late May/ early June plunge through notable supports at 108.47 and 107.97 (from January 2019), keeping the bias lower into Monday.
The May surrender of 109.66 set an intermediate-term bear trend
- We see a downside bias for 107.79/74; break here aims for 107.10.
- But above 108.62 quickly opens risk up to 108.93, maybe towards 109.59.
Intermediate-term Outlook – Downside Risks: We see a downside risk for 107.74, 106.72/55 and 105.00/104.78
- What Changes This? Above the resistance gap at 109.92 shifts the outlook back to neutral; above 110.67 is needed for a bull theme.
4 Hour Chart
USDCAD intermediate-term bearish shift
A plunge lower in early June and again Friday to shift the intermediate-term outlook from bullish to neutral and now to bearish through 1.3270.
Furthermore, the plunge lower Friday through the key 1.3270 level keeps the risks lower for Monday.
- We see a downside bias for 1.3258 and 1.3246; break here aims for 1.3206, maybe towards 1.3155.
- But above 1.3316 opens risk up to 1.3366.
Intermediate-term Range Breakout Parameters: Range seen as 1.3270 to 1.3565.
- Upside Risks: Above 1.3565 sets a bull trend to aim for 1.3665, 1.3794 and 1.4000.
- Downside Risks: Below 1.3270 sees a bear trend to target 1/.3114/10, 1.3064 and 1.300.
4 Hour Chart