USDJPY and USDCAD intermediate-term bear trends questioned

Chris Lee

  • Both USDJPY and USDCAD are currently in short-term recovery phases within intermediate-term bearish trends.
  • We see risks for these recovery phases to extend and for the intermediate-term trends to shift from bearish to neutral and maybe to bullish.
  • For USDJPY above 113.39 would switch the intermediate-term outlook to neutral, whilst above 114.55 is required for a bull theme.
  • With respect to USDCAD, however, just a push above 1.3226 would shift the intermediate-term outlook straight bullish.


USDJPY Upside threat intact

A Thursday-Friday rebound from just below our 111.98/96 support area (from 111.93), to prod above the 112.52 impulse resistance, to reinforce the advance last week (before and after the Fed Minutes) above the notable 112.50/54 resistances, thereby sustaining upside pressures evident since the reversal of the October down trend line, to keep the bias higher Monday.

We see an intermediate-term bear trend from the break below 112.53, BUT risk is growing for a shift back to neutral above 113.39

For Today:

  • We see an upside bias for 112.65 and quickly to 112.73/83; break here opens risk up towards key 113.28/39.
  • But below 111.98/96 aims at 59 and opens risk down to 111.35 and 111.09/01.

Intermediate-term Outlook – Downside Risks: We see a downside risk for 110.36 and 110.00.

  • What Changes This? Above 113.39 shifts the outlook back to neutral; above 114.55 is needed for a bull theme.

Resistance and Support:

112.65 112.73/83* 113.28/39*** 113.82** 114.10/15*
111.98/93** 111.59* 111.35 111.09/01** 110.71

4 Hour USDJPY Chart

 usdjpy chart

USDCAD Upside risks

Again, another firm advance Friday to build on the rally from mid-October, through notable 1.3072/82 resistance peaks and to prod at the down trend line from June, to flip risks lower Monday.

We see an intermediate-term bearish theme, BUT see growing risks for an intermediate-term shift straight from bearish to bullish above 1.3266.

For Today:

  • We see an upside bias for 1.3132; break here aims for 1.3198 and key 1.3266, maybe 1.3247.
  • But below 1.3061 opens risk down to 1.3023/15.

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:

1.3132 1.3198* 1.3226*** 1.3247 1.3290**
1.3061 1.3023/15** 1.2979 1.2912** 1.2885*

4 Hour USDCAD Chart

 usdcad chart