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USDCAD Outperforms Following Data, USDJPY Consolidating Above 155.00

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  • Despite the solid moves in core fixed income markets on Wednesday, G10 currencies traded in relatively narrow ranges. Higher yields have moderately benefitted the dollar index (+0.21%), whilst continuing to weigh on the Japanese yen.
  • USDJPY sprung to life approaching the US data, breaching the 155.00 handle for the first time since 1990. Stops may have been triggered through this mark, prompting a fresh cycle high of 155.17. Despite the level breach, and trend conditions remaining firmly bullish, the pair had an immediate & sharp 35 pip turnaround to print 154.81 before the durable goods data release. This emphasises the ongoing caution for traders, as intervention risks inevitably mount.
  • Since then, USDJPY has consolidated back above 155.00 as we approach the APAC crossover. 155.29, a Fibonacci projection level, has capped the topside. On the downside, support lies much lower at 153.13, the 20-day EMA.
  • USDCAD (+0.42) received a boost following soft Canadian retail and manufacturing sales, leaving the Canadian dollar as the poorest performing major currency in G10. USDCAD has breached yesterday’s high of 1.3714 and a clear break opens 1.3855 next, the Nov 10 ‘23 high. Note that moving average studies remain in a bull-mode position, highlighting a clear rising trend.
  • Higher core yields appeared to have a greater impact on emerging market currencies, with the likes of MXN, PLN and ZAR all underperforming. USDMXN in particular has risen back above the 17.00 mark and will eye another test of 17.3860, the Jan 17 high, which represents an important reversal trigger.
  • All focus turns to the advance reading of first quarter GDP in the US on Thursday, before Friday’s Bank of Japan decision.
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  • Despite the solid moves in core fixed income markets on Wednesday, G10 currencies traded in relatively narrow ranges. Higher yields have moderately benefitted the dollar index (+0.21%), whilst continuing to weigh on the Japanese yen.
  • USDJPY sprung to life approaching the US data, breaching the 155.00 handle for the first time since 1990. Stops may have been triggered through this mark, prompting a fresh cycle high of 155.17. Despite the level breach, and trend conditions remaining firmly bullish, the pair had an immediate & sharp 35 pip turnaround to print 154.81 before the durable goods data release. This emphasises the ongoing caution for traders, as intervention risks inevitably mount.
  • Since then, USDJPY has consolidated back above 155.00 as we approach the APAC crossover. 155.29, a Fibonacci projection level, has capped the topside. On the downside, support lies much lower at 153.13, the 20-day EMA.
  • USDCAD (+0.42) received a boost following soft Canadian retail and manufacturing sales, leaving the Canadian dollar as the poorest performing major currency in G10. USDCAD has breached yesterday’s high of 1.3714 and a clear break opens 1.3855 next, the Nov 10 ‘23 high. Note that moving average studies remain in a bull-mode position, highlighting a clear rising trend.
  • Higher core yields appeared to have a greater impact on emerging market currencies, with the likes of MXN, PLN and ZAR all underperforming. USDMXN in particular has risen back above the 17.00 mark and will eye another test of 17.3860, the Jan 17 high, which represents an important reversal trigger.
  • All focus turns to the advance reading of first quarter GDP in the US on Thursday, before Friday’s Bank of Japan decision.