USD/JPY Aims Higher as USD/CAD Reacts to Oil Recovery
USD/JPY Bullish Momentum Building
The USD/JPY pair is exhibiting renewed strength, having broken through the 155.00 resistance level. This suggests a potential continuation of the upward trend, with traders now focusing on higher price targets. A rising channel is forming, providing support around the 155.50 level on the 4-hour chart, which could be a key area for monitoring potential pullbacks and continuation patterns. Elsewhere, the EUR/USD pair is facing resistance between 1.1840 and 1.1860.
Crude oil prices have experienced a slight correction, falling below $65.20 after a period of gains. This could be a temporary consolidation before another potential move higher.
USD/JPY Technical Outlook
The U.S. Dollar has established a base above the 154.00 level against the Japanese Yen, paving the way for a sustained advance. The pair has moved decisively above 154.80 and 155.00, confirming the bullish sentiment. Analysis of the 4-hour chart shows the pair is comfortably positioned above 155.00, as well as the 100-period and 200-period simple moving averages. The price action has also surpassed the 61.8% Fibonacci retracement level of the recent downward move from the 157.66 swing high to the 152.27 low, further reinforcing the bullish outlook.
Immediate resistance is near the 156.50 level, with a more significant resistance zone at 156.80. A successful breach above this level could trigger a rally towards 157.20, with the ultimate target being the 158.00 resistance area. Immediate support can be found at 155.50, coinciding with the lower boundary of the rising channel. Traders should watch these levels closely for potential trading opportunities.
USD/CAD and the Influence of Oil Prices
The USD/CAD pair is currently trading around 1.3660, depreciating as the Canadian Dollar (CAD) gains support from improved oil prices. Canada's status as a major crude exporter to the United States makes its currency sensitive to fluctuations in oil prices. The Canadian Dollar's valuation is subject to various factors, including domestic monetary policy and global commodity prices.
Key factors influencing the CAD include:
- Policy decisions by the Bank of Canada (BoC)
- Fluctuations in oil prices
- The overall health of the Canadian economy
- Prevailing inflation levels
- The nation's trade balance
Broader market sentiment also plays a significant role. Risk appetite typically benefits the CAD, while risk aversion can weigh on the currency. Given the close economic ties between the two nations, the performance of the U.S. economy also has a considerable impact on the Canadian Dollar.
The Interplay of Monetary Policy and Economic Data
The Bank of Canada exerts considerable influence over the Canadian Dollar through its control of short-term interest rates. By adjusting the overnight rate, the BoC influences borrowing costs throughout the economy. The central bank's primary objective is to maintain inflation within a target range of 1-3%. Higher interest rates generally bolster the CAD, attracting foreign capital seeking higher yields.
Beyond interest rate adjustments, the BoC can also employ quantitative easing (QE) or quantitative tightening (QT) to manage credit conditions. QE, which involves injecting liquidity into the financial system, typically weakens the CAD, while QT, which reduces liquidity, tends to strengthen it. As a major exporter of crude oil, Canada's currency is highly correlated to oil prices. Rising oil prices usually cause the CAD to appreciate as demand for the currency increases. Conversely, falling oil prices often lead to CAD depreciation.
Track markets in real-time
Empower your investment decisions with AI-powered analysis, technical indicators and real-time price data.
Join Our Telegram Channel
Get breaking market news, AI analysis and trading signals delivered instantly to your Telegram.
Join Channel
PriceONN News
Brent oil price rose to the highest in over one week on Tuesday, in extension of Monday’s nearly 5% advance, following the latest verbal escalation by President Trump that quickly changed the sentiment and countered efforts of Iran and Oman to find solution for reopening of strategic Hormuz strait. The latest demands from President Trump […] The post Brent Oil Price Falls After Recovery Failed to Clear Important $90 Barrier appeared first on ActionForex.
PriceONN News
Hello fellow traders. In this technical article we’re going to take a look at the Elliott Wave charts charts of Copper (HG_F) commodity published in members’ area of the website. As our members know, Copper Futures recently completed a pullback that provided a high-probability trading setup. The decline unfolded as a clear Elliott Wave Zig […] The post Copper (Hg_F) Elliott Wave: Targeting a Buy at the Blue Box appeared first on ActionForex.
PriceONN News
Overnight, the RBA held its cash rate steady at 4.35%, as widely expected after June’s inflation data came in softer than forecast at 3.8% headline. Yet the accompanying statement struck a notably cautious tone, warning that trimmed mean inflation remains elevated and largely unchanged from the March quarter, with oil and related commodities still trading […] The post EUR/AUD: Two Central Banks on Hold, One Triangle About to Break appeared first on ActionForex.
PriceONN News
Easing concerns over the situation in the Strait of Hormuz provided support for risk-sensitive assets. On 8 August, the Iranian side reported progress in talks with Oman over a possible new route through the strait, although the implementation of any agreement remains dependent on additional conditions. Reduced concerns over potential disruptions to energy supplies helped […] The post Ethereum Analysis: Attempted Breakout from the Sideways Structure appeared first on ActionForex.
PriceONN News
The Consumer Price Index (CPI) rose by 0.1% month-on-month (m/m) in July – in line with expectations. On a twelve-month basis, CPI edged down to 3.4% (from 3.5% in June). Energy costs fell by 1.5% m/m, led by a 2.9% m/m decline in prices at the pump. Food prices rose 0.1% m/m – its softest […] The post US: Inflationary Pressures Remain Subdued in July appeared first on ActionForex.
PriceONN News
US inflation eased as expected in July, reinforcing case for Fed to stay on hold while it waits for clearer evidence on both prices and labor market. Headline CPI rose from -0.4% to 0.1% m/m, while annual rate slowed from 3.5% y/y to 3.4%. Core CPI increased from 0.0% to 0.2% m/m, with annual core […] The post US CPI Slows to 3.4% as Core Inflation Eases to 2.5% appeared first on ActionForex.
PriceONN News
Whatever the inflation figures may be, the precious metal will come out on top. Japan and the US don’t want to give the yen’s fate to speculators. The US dollar continues to recover from the blow dealt by the labour market statistics. A rally in Treasury bond yields is driving the rise in the USD […] The post Gold as a Sure-Fire Bet appeared first on ActionForex.
PriceONN News
Germany’s benchmark index just made history, breaking above 26,500 for the first time ever, extending a rally that has already delivered close to 10% over the past twelve months. The move came on fresh optimism around a potential resolution to the Iran conflict, though that optimism proved short-lived: President Trump’s latest demands, that Tehran compensate […] The post DAX 40: Record Highs, Real Fundamentals, One Channel Left to Test appeared first on ActionForex.
PriceONN News
The NFIB’s Small Business Optimism Index rose 2.4 points to 99.8 in July, soundly beating expectations for a roughly flat reading of 97.5. Eight out of the ten index subcomponents improved during the month and two deteriorated. The largest improvement came from the net share of firms planning to increase employment (up 9 points to […] The post US: Small Business Optimism Spiked in July appeared first on ActionForex.
PriceONN News
A deal to reopen the Strait of Hormuz is not inevitable. Oil prices are rising amid growing risks of an escalation of the conflict in the Middle East. The US dollar continued to recover from losses caused by the jobs report, against a backdrop of rising geopolitical tensions in the Middle East with traders squaring […] The post Brent Is Following a Path of Demands Rather Than Commitments appeared first on ActionForex.
PriceONN News
Gold rose to 4,400 USD per ounce on Tuesday, reaching a two-month high. Demand for the precious metal is growing rapidly, even amid heightened inflation risks and expectations of higher interest rates driven by elevated oil prices. Chinese institutional investors continue to build positions in gold as a defensive asset amid heightened volatility in other […] The post Gold Rallies: Long-Awaited Rise and Growing Safe-Haven Demand appeared first on ActionForex.
PriceONN News
RBA on hold as expected, recognising the data has broken against its hawkish narrative. Base case clearly an extended period on hold, but RBA will hike if upside risks to inflation materialise. As widely expected, the RBA Monetary Policy Board (MPB) kept the cash rate on hold at 4.35% at its August meeting. The accompanying […] The post RBA Holds at 4.35%, Narrows Risk of Hikes appeared first on ActionForex.