USDCAD re-energized bull trend; USDJPY bull breakout risk

Chris Lee

  • A more hawkish tone from the Fed alongside global trade war concerns have seen a return of US$ strength through mid-June.
  • In our report here from 28th May we highlighted the USDCAD shift to an intermediate-term bull trend, which is now fully re-energized.
  • For USDJPY we currently see an intermediate-term range theme defined as 111.08 to 108.08, but with a strong bias for a bull breakout above 111.08.


USDCAD Bull theme re-energised

A robust upside follow-through Friday above the prior cycle high at 1.3125 and also 1.3155 and 1.3198 resistances to build on the strong rally Thursday through previous failure peaks at 1.3052 and 1.3067, to keep the bias higher for Monday.

The early May break above 1.2944 sets an intermediate-term bull trend.

For Today:

  • We see an upside bias for 1.3208; above quickly targets 1.3236, maybe 1.3261 and even 1.3347.
  • But below 1.3120 points to 1.3082 and targets 1.3025.

 Intermediate-term Outlook – Upside Risks: We see an upside risk for 1.3125.

  • Higher targets would be 1.3347.
  • What Changes This? Below 1.2725 shifts the outlook to neutral; below 1.2536 sees a switch to a bear trend.

Resistance and Support:

1.3208 1.3236 1.3261 1.3298 1.3347
1.3120 1.3082* 1.3025 1.2945* 1.2917*

4 Hour USDCAD Chart

 usdcad chart

USDJPY Still an upside threat to key 111.08

A prod higher above 110.85 Friday and despite a dip, we still see upside pressures from Thursday’s setback and strong rebound from just above our 109.82 support (from 109.89), keeping the bias higher for Monday.

The early June push through 109.83 shifted the intermediate-term view from bearish back to a range theme (111.08 to 108.08), BUT with skewed risk to the upside.

For Today:

  • We see an upside bias for 110.90 and key 111.08, possibly towards the 111.40 peak.
  • But below 109.89/82 targets 109.42, and then maybe towards 109.17/14.

Intermediate-term Range Breakout Parameters: Range seen as 111.08 to 108.08.

  • Upside Risks: Above 111.08 sets a bull trend to aim for 111.40/48, 113.39/55 and 114.73.
  • Downside Risks: Below 108.08 sees a bear trend to target 106.85/59, 105.63 and 104.54.

Resistance and Support:

110.90 111.08*** 111.40/48** 111.70 111.12
109.89/82* 109.42 109.17/14** 108.70 108.37/32

4 Hour USDJPY Chart

usdjpy chart

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