Weekly Technical Perspective On USD/CAD, USD/JPY And GBP/CAD


USD/CAD WEEKLY PRICE CHART

USD/CAD Price Chart - Weekly Timeframe

Notes: Is the Canadian Dollar finally poised to strengthen (USD/CAD lower)? Price turned from key confluence resistance last week at 1.3103/32, “where the 100% extension of the September advance and the 61.8% retracement of the 2017 decline converges on the upper median-line parallel.” The reversal came alongside a brief probe above 60 in weekly RSI and heading into the close of the month, the risk is lower while below this threshold.

Bottom Line: Price has turned from resistance and we’re looking for evidence that a more significant high is in place. From a trading standpoint, I’ll favor fading strength while below structural resistance – interim support rests with the 52-week moving average / basic slope support ~1.2820s with a break below 1.2686 needed to validate the reversal. A breach / weekly close above the upper parallel would expose a topside rally targeting the 2017 high-week close at 1.3647.

USD/JPY WEEKLY PRICE CHART

USD/JPY Price Chart - Weekly Timeframe

Notes: The Japanese Yen may be poised for further strength (USD/JPY lower) after breaking below slope support (red) last week. Note that momentum does look a bit tired here and the possibility for a near-term recovery remains- that said, look for resistance ahead of last week’s high / the March open at 106.64/66.

Bottom line: Our outlook remains unchanged and we’ll favor, “fading strength sub-107.84 with a break lower targeting confluence support at 103.04/40 where the 100% extension and the 78.6% retracement converge on broader slope support (critical).”

USD/JPY IG CLIENT POSITIONING

USD/JPY IG Client Sentiment

  • A summary of IG Client Sentiment shows traders are net-long USDJPY- the ratio stands at +2.69 (72.9% of traders are long) –bearish reading
  • Retail has remained net-long since Dec 29th; price has moved 6.9% lower since then
  • Long positions are 0.1% lower than yesterday and 11.8% lower from last week
  • Short positions are 12.3% lower than yesterday and 14.7% lower from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests USDJPY prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger USDJPY-bearish contrarian trading bias.
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