US Dollar intermediate-term weakness versus both Euro and JPY

Chris Lee

  • The US$ remains the weakest currency within G3 (USD, JPY, EUR) on an intermediate-term outlook.
  • The USDJPY push below the April gap at 109.57-45 shifted the intermediate term outlook to bearish.
  • EURUSD retains its intermediate-term bullish theme since the April push above 1.0906.
  • In the very near term, however, the threat is for a minor US dollar positive correction.

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USDJPY – Intermediate-term bear shift, but upside correction bias

Another push higher as anticipated Friday, pushing up through resistance at 110.74, reinforcing a small base pattern and keeping the bias to the upside into Monday.

Furthermore, the close of the April gap at 109.57-45 shifted the intermediate term outlook to bearish.

For Today:

l We see an upside bias for 110.81; break here aims towards 111.71/80.

l But below 109.52 opens risk down to 109.08/00, 108.85 and maybe 108.69/66.

Intermediate-term Outlook – Downside Risks:

l We see a negative tone with the bearish threat to 108.10.

l Below here targets 107.19, 105.99 and 104.93.

What Changes This? Above 112.13 signals a neutral tone, only shifting positive above 114.37.

4 Hour USDJPY Chart


EURUSD – Downside correction bias

A further prod lower Friday, setting back since the Thursday ECB Meeting, again below support in the 1.1202/00 area, indicating a mini-topping pattern, keeping risk lower into Monday.

However, the April push above 1.0906 signalled an intermediate-term bullish shift.

For Today:

l We see a downside bias for 1.1162; break here aims for 1.1107.

l But above 1.1235/40 opens risk up to 1.1285 and a key target 1.1300 and maybe through here up towards 1.1366.

Intermediate-term Outlook – Upside Risks:

l We see a positive tone with the bullish threat to 1.1300.

l Above here targets 1.1366, 1.1428/47, may be as high as 1.1616.

What Changes This? Below 1.0568 signals a neutral tone, only shifting negative below 1.0493.

Daily Chart