- The US dollar continues to strengthen, reacting to positive data for the US economy, the perception of a more hawkish Fed and the anticipation of tax reform.
- This continues to allow the USDJPY FX rate to strengthen, now aiming at a key resistance level at 114.50.
- For USDCAD, the previous downtrend from mid-2017 has been reversed, shifting the intermediate term outlook to bullish, pointing higher into November.
USDJPY
Rebound bias
Another solid advance Wednesday building on Tuesday’s rebound from significantly above support at 112.53, rejecting the setback from the end of last week, keeping the risk back higher into the Fed Meeting and for Thursday.
The late September push through 112.20 produced a bullish shift in the intermediate-term outlook, reinforced by bullish October price action.
For Today:
l We see an upside bias for 114.28 and then to target key 114.45/50.
l But below 113.57 targets for 112.93.
Intermediate-term Outlook – Upside Risks:
l We see a positive tone with the bullish threat to 114.50
l Above here targets 115.50/63 and maybe towards 118.65.
What Changes This? Below 111.45 signals a neutral tone, only shifting negative below 109.53.
Resistance and Support:
| 114.28 | 114.45/50*** | 114.89 | 115.20 | 115.50/63*** |
| 113.57 | 112.93** | 112.53* | 112.28** | 112.01 |
4 Hour Chart
USDCAD
Bullish threat
A high-level consolidation Wednesday, reinforcing Monday’s rebound from above support at 1.2774 and last Wednesday’s surge higher after the Bank of Canada Meeting above key resistance at 1.2778, aiming higher again Thursday.
Furthermore, the push above 1.2778 shifted the intermediate term outlook to bullish.
For Today:
l We see an upside bias up to and likely through 1.2917 up closer to 1.2930/33.
l But below 1.2774 opens risk down to 1.2723, maybe closer to 1.2632.
Intermediate-term Outlook – Upside Risks:
l We see a positive tone with the bullish threat to 1.3015.
l Above here targets 1.3347 and 1.3550.
What Changes This? Below 1.2429 signals a neutral tone, only shifting negative below 1.2194.
Resistance and Support:
| 1.2917 | 1.2930/33 | 1.3000/15** | 1.3150/55 | 1.3260* |
| 1.2774 | 1.2723 | 1.2632** | 1.2609* | 1.2567 |
Daily Chart
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