USDJPY bullish signal; USDCAD deeper, downside correction threat

Chris Lee

  • A mixed tone for the US Dollar versus the Japanese yen and Canadian Dollar.
  • USDJPY has shifted from an intermediate-term range theme to an intermediate-term bull trend with the prod above 111.08 and a subsequent high -level consolidation in early July, leaving risks for further upside into this month.
  • The USDCAD intermediate-term bull trend has been correcting lower in July, after a late June small Double Top, BUT with risks growing to neutralise the bull trend, but only below 1.2945.


Still a rebound bias

A rally and a setback Friday, but whilst holding above the support area at 110.27/25 we still see a bull bias from the early July probe above the key 111.08 impulse resistance from May, leaving a rebound bias for Monday.

The early July prod above 111.08 shifted the intermediate-term view to bullish.

For Today:

  • We see an upside bias for 111.13, then the cycle peak at 111.40, maybe 111.88
  • But below 110.27/25 opens risk down to 109.95, maybe for 109.65

Intermediate-term Outlook – Upside Risks: We see an upside risk for 111.40/48.

  • Higher targets would be 113.39/55 and 114.73.
  • What Changes This? Below 109.35 shifts the outlook back to neutral; just below through 109.17 is needed for a bear theme.

Resistance and Support:

111.13 111.40*** 111.88 112.27 112.79
110.27/25 109.95 109.66* 109.35 109.17/14**

4 Hour Chart

USDJPY Chart 2018-07-09


Downside risks

A selloff Friday to probe 1.3082 support as we had flagged, further reinforcing Wednesday’s prod below 1.3126/20 support and the early July setback from below 1.3227 resistance, sustaining downside pressures from the small Double Top pattern (through 1.3256/55), keeping risk lower for Monday.

The early May break above 1.2944 sets an intermediate-term bull trend, BUT we see growing risk for an intermediate-term shift to neutral below 1.2945.

For Today:

  • We see a downside bias for 1.3076; break here aims for 1.3025 and 1.3000, maybe towards key 1.2945.
  • But above 1.3117 opens risk up to 1.3176; break here maybe aims for 1.3225/27.

 Intermediate-term Outlook – Upside Risks: We see an upside risk for 1.3347.

  • Higher targets would be 1.3500, 1.3550 and 1.3794.
  • What Changes This? Below 1.2945 shifts the outlook bullish straight to a bear trend.

Resistance and Support:

1.3117 1.3176 1.3225/27* 1.3268** 1.3351*
1.3076 1.3025 1.3000* 1.2945*** 1.2917

4 Hour Chart

USDCAD Chart 2018-07-09

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