USD/CAD Wavers at Fibonacci Resistance as USD/JPY Makes Move on Trendline Support - buzzfeed.work
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USD/CAD AND USD/JPY FORECAST:

  • USD/CAD wavers after reaching a key technical resistance region, with bulls and bears fighting for control of the market
  • USD/JPY heads lower and challenges trendline support as sellers eye a possible breakdown
  • This article looks at key technical levels to keep an eye on in the coming days

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USD/CAD TECHNICAL ANALYSIS

USD/CAD was largely flat on Wednesday despite broad U.S. dollar weakness in the FX space, oscillating between small gains and losses near the 1.3633 level, a key resistance region. The lack of direction may be due to market indecision following the pair’s strong rally in recent days, which saw the exchange rate appreciate by almost 2.6% in less than 10 trading sessions, so a pause makes sense from a technical standpoint.

With sentiment on fragile footing amid growing recession fears, high-beta currencies could underperform in the near term, creating a negative environment for the Canadian dollar, especially if market turbulence intensifies. In this context, USD/CAD remains well-placed to extend its advance heading into next month.

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To have more conviction in the bullish scenario, the pair must clear confluence resistance at 1.3645 soon, a key technical barrier where short-term trendline resistance aligns with the 61.8% Fibonacci retracement of the March/April pullback. If this ceiling is breached, buyers could become emboldened to launch an attack on 1.3700, followed by the 2023 highs.

Conversely, if USD/CAD gets rejected from current levels and bears regain control of price action, the first support to consider appears at 1.3580, which corresponds to the 50-day simple moving average. If this floor is taken out, the next downside target to keep an eye on rests near the psychological 1.3500 handle.




of clients are net long.




of clients are net short.

Change in Longs Shorts OI
Daily -13% 16% 4%
Weekly -35% 40% 0%

USD/CAD TECHNICAL CHART

Chart, histogram  Description automatically generated

USD/CAD Chart Prepared Using TradingView

USD/JPY TECHNICAL ANALYSIS

While the U.S. dollar tends to appreciate against high-beta currencies during risk-off episodes, this dynamic does not frequently occur against the Japanese yen, which is also considered a safe-haven asset. For this reason, USD/JPY tends to be more sensitive to interest rate differentials between the US and Japan.

Turning our attention to technical analysis, USD/JPY has started to pull back in recent days after failing to break above resistance at 134.80, a sign that the bulls may be bailing amid the exhaustion of upside momentum.

With the pair moving towards trendline support at 133.00, sellers may be in a better position to regain the upper hand if they manage to push prices below that floor. Should this scenario play out, USD/JPY could head sharply lower, potentially challenging the 131.00 level in short order.

Conversely, if USD/JPY resumes its rebound and charges higher, it could encounter resistance at 134.80, but if a breakout materializes this time, buying momentum could accelerate, paving the way for a rally towards 136.60, the 38.2% Fibonacci retracement of the October 2022/January 2023 selloff.




of clients are net long.




of clients are net short.

Change in Longs Shorts OI
Daily -5% -3% -4%
Weekly -3% -9% -6%

USD/JPY TECHNICAL CHART

Chart, histogram  Description automatically generated

USD/JPY Chart Prepared Using TradingView

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