USDJPY and USDCAD bearish outlooks

Chris Lee

  • A negative US$ Dollar tone has resurfaced in early 2018 against most G10 currencies.
  • The US Dollar has generally weakened since the last rate hike from the Fed back in December.
  • For both USDJPY and USDCAD this USD weakness sees risks for downside challenges to support through mid-January and maybe beyond.
  • USDJPY targets 110.82, 110.00, 109.53 and maybe even to 107.29.
  • USDCAD aims lower for 1.2429, possibly 1.2194 and 1.2060.

USDJPY Intermediate-term bear trend reinforced

Another rebound failure Friday (as also seen Thursday), this tone back from below our 111.88/96 resistance area (from 111.44) to probe to a new downside correction low, sustaining negative pressures from last Wednesday’s plunge lower through the key 112.01 level, to set risks lower again for Monday.

The selloff below 112.01 was an intermediate-term bearish range breakout, setting a bear theme at least into January (whilst below 112.79).

For Today:

  • We see a downside bias for 111.25 and 111.12; break here aims for key 110/.82 and then maybe for 110.32.
  • But above 111.88/96 aims for 112.38 and possibly opens risk up to key 112.79 (which we would look to try to cap).

Intermediate-term Outlook – Downside Risks:

  • Whilst below 112.79 we see a bear theme with the downside threat to 110.82, 110.00, 109.53 and potentially closer to 107.29.

What Changes This? Above 16112.79 signals a neutral tone, only shifting bullish below 113.75.

Resistance and Support:

111.08 111.44 111.88/96** 112.38* 112.79***
110.88/82*** 110.75 110.32 110.00** 119.53*

4 Hour USDJPY Chart


USDCAD Downside bias

A Friday push lower through 1.2502 support, has eased the rebound bias after the Thursday failure back from our key resistance at 1.2589, flipping the bias lower for Monday.

A negative breakout through 1.2620 in latter 2017 shifted the intermediate-term outlook to the downside for January, withrisk now fading for a shift back to neutral, seen above 1.2589.

For Today:

  • We see a downside bias for 1.2423; break here aims for 1.2394, maybe towards 1.2351.
  • But above 1.2506 opens risk up to 1.2553.

 Intermediate-term Outlook – Downside Risks:

  • Whilst below 1.2589 we see a negative tone with the bearish threat to target 1.2429, possibly 1.2194 and 1.2060.

What Changes This? Above 1.2589 signals a neutral tone, only shifting positive above 1.2728.

Resistance and Support:

1.2506 1.2553 1.2589*** 1.2653* 1.2555
1.2423 1.2394 1.2351* 1.2332** 1.2252*

4 Hour USDCAD Chart