USDJPY upside correction threat, but USDCAD extends bear trend

Chris Lee

  • USDJPY currency pair has rebounded with the broader, global asset class bias back towards a “risk on” feel.
  • This is alongside a slight shift to a less dovish tone from Fed speakers over the past week, helping the US Dollar slighting higher.
  • A plunge lower for the USDCAD Forex rate into late June, spurred on by a shift back towards the global “risk on” tone, given hopes for the now resuming US-China trade talks.
  • The Canadian Dollar is being helped higher as well by the strengthening Oil price.

USDJPY correction bias stays higher

A small dip and a small bounce Friday after Thursday’s further firm rebound to overcome solid resistance at 107.73/76 (but then to stall at the bear trend line from April and exactly at our 108.16 resistance level), but whilst holding above 107.33 we still see very short-term upside forces and correction risks higher into Monday.

The May surrender of 109.66 set an intermediate-term bear trend

For Today:

  • We see an upside bias for 108.16; break here aims for 108.40, maybe 108.72/80.
  • But below 107.33 opens risk down to 106.75/72.

Intermediate-term Outlook – Downside Risks: We see a downside risk for 106.72/55 and 105.00/104.78

  • What Changes This? Above the resistance gap at 108.72/80 shifts the outlook back to neutral; above 109.92 is needed for a bull theme.

4 Hour USDJPY Chart

USDCAD bear forces intact

A prod lower Friday push just through our support at the multi-month low at 1.3064, leaving bear forces from Thursday’s plunge lower, extending bear forces from the aggressive latter June plunge after the Fed Meeting, keeping risks lower for Monday.

The June plunge through 1.3270 set an intermediate-term bearish trend.

For Today:

  • We see a downside bias for 1.3054; break here aims maybe towards 1.3000, maybe 1.2961.
  • But above 1.3138 opens risk up to 1.3196.

Intermediate-term Outlook – Downside Risks: We see a downside risk for 1.3064, 1.3000 and 1.2755.

What Changes This? Above key 1.3430/49 shifts the intermediate-term outlook back to neutral; above 1.3565 is needed for an intermediate-term bull theme.


4 Hour USDCAD Chart