Article by ForexTime
There has been no major moves economically speaking in the market, but there is plenty on the horizon and markets will shortly be focused on data out of Japan with household spending likely to be the main focus. Japan’s ability to spend has been sharply in the microscope under Abenomics as he tries to break the culture of saving and push Japanese to be more consumer friendly with their cash to boost GDP but also to help increase tax revenue. It’s likely that the market will be looking for weaker numbers here and expecting the market to rally further against the Yen, which has recently clawed back some ground against the USD.
Technically speaking the USDJPY ran out of steam at resistance at 114, as the market started to unwind some of its positions to take profit. Since then we have also seen it push down to support at 111.843 before failing to find any further legs for the bears, this is a bullish signal for the most part and the market may look to restart further moves higher as a result. If we did see further drops I would expect the 20 day moving average to finally play catch up and act as dynamic support for the USDJPY. Expectations around the bulls breaking higher will find the next level of resistance at 116.591.
On Thursday I spoke about the Canadian dollar and it continues to struggle to find any ground other than through the current OPEC meetings. There is however a number of Canadian economic events on the horizon which will have some impact, and I am expecting this to flow onto the market. It will be hard to beat the current USD strength though without some sort of major data boost or an OPEC deal (a struggle at this time). Certainly with the Trump dollar in full force and markets looking forward not backwards the USDCAD could certainly still remain in the territory of the bulls for the time being.
The obvious correlation between oil and the CAD has so far helped it not further erode anymore ground to the USD and support at 1.3402 continues to be a major level which has prevented further drops on the charts. One thing that is worth noticing is the 50 day moving average which is creeping up the charts and looking very imposing as a possible catalyst for dynamic support, after future touches on the daily chart were met with strong buying. In the even the bulls do manage to regain control the market is likely to jump back up to 1.3542, but with the USDCAD long term horizons always need to be careful as the pair is known to range.
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Article by ForexTime
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