USDJPY Threatens a Recovery; USDCAD Downside Correction Bias


  • The past week has seen a renewal of a “risk on” environment across multiple asset classes, highlighted by the price action after Friday’s US Employment report, with the bearish themes from a global trade war and a more hawkish FOMC dissipating.
  • For the US Dollar, a modest weakening against Major currencies has emerged, although the start of a potential strengthening against the Japanese Yen, the “go to” safe haven currency.
  • Although the US$ has setback against most major currencies in the past week, USDJPY has begun to rebound, threatening a small base and maybe a better recovery tone.
  • The US Dollar has rallied significantly against the Canadian Dollar from February, with the threat of a trade war and the implementation of tariffs by the US, BUT negative USDCAD price action over the past week, leaves USDCAD open to a deeper, corrective setback through mid-March.

Read more technical analysis.


Upside correction bias

A prod higher Friday above 106.46, 106.80/85 resistances and significantly the down trend line from early February (as we had flagged), to build on Wednesday’s intraday bounce from 105.43, setting the bias higher Monday.

The mid-January selloff below 112.01 produced an intermediate-term bearish shift.

For Today:

  • We see an upside bias for 107.05; break here aims for 107.20, maybe for 107.68.
  • But below 106.11 opens risk down to 105.70 , possibly then for 105.43, 105.25 and 105.16.

Intermediate-term Outlook – Downside Risks:

  • Whilst below 108.00 we see a bear theme with the downside threat to 104.93,104.06 and 101.15.

What Changes This? Above 108.00 signals a neutral tone, shifting bullish below 109.31.

Resistance and Support:

107.05 107.20** 107.68** 107.90/108.00*** 108.51*
106.11 105.70 105.43 105.25/16** 105.00/104.93***

4 Hour Chart



Deeper downside correction bias

A more significant setback Friday as we had been looking for through the 1.2861/53 support area, reinforcing the failure last week back from the new cycle high (set Tuesday) at 1.3001 (from 1.2961), to keep the bias for a deeper correction lower Monday.

The latter February break above 1.2728  set a bullish intermediate-term view.

For Today:

  • We see a downside bias for 1.2805; break here aims for 1.2758, maybe 1.2727.
  • But above 1.2853 opens risk up to 1.2891 and maybe towards 1.2961.

Intermediate-term Outlook – Upside Risks:

  • Whilst above 1.2612 we see a positive tone with the bullish threat to 1.3000/15 and 1.3347.

What Changes This? Below 1.2612 signals a neutral tone, only shifting negative below 1.2445.

Resistance and Support:

1.2853 1.2891* 1.2961* 1.3001** 1.3051
1.2861/53* 1.2805** 1.2758** 1.2758* 1.2727

4 Hour Chart


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