The USD/JPY closed flat at 110.18. The USD/CAD slipped 0.1% to 1.3046. Later today, Canada's November manufacturing sales will be reported (-0.5% on month estimated).
Other commodity-linked currencies fell against the greenback. Both AUD/USD and NZD/USD edged down 0.1% to 0.6877 and 0.6609, respectively. For now, the investor's eyes will remain on the technical side of the market.
USD/JPY - Choppy Session Continues!
The USD/JPY pair closed at 110.178 after placing a high of 110.215 and a low of 110.102. Overall the movement of the USD/JPY pair remained bullish throughout the day.
On Monday, the USD/JPY pair moved in a bullish trend amid the strength of the US dollar. Ahead of the monetary policy meeting of Bank of Japan, the Japanese Yen remained under pressure on Monday and hence gave a boost to USD/JPY prices.
At 9:30 GMT, the Revised Industrial Production for November was released from Japan, which showed a decline to -1.0% against the expected -0.9% and weighed on single currency Japanese Yen.
Weaker than expected Industrial Production from Japan gave a boost to USDJPY prices on Monday. The Bank of Japan is scheduled to announce its monetary policy statement on Tuesday, which will profoundly affect the Japanese Yen.
Last December, the Chairman of Bank of Japan, Kuroda has stated that there was room for further easing towards Japanese Yen. He said that if the inflation continued to lag from BoJ's target of 2%, then the bank would not hesitate to take measures. However, another rate cut by BoJ is not expected in the market on Tuesday, but the dovish tone would be under the primary focus of traders.
On the other hand, there was a holiday in the United States, which limited the volume of trades in the market. And the latest developments in Middle-East were almost ignored due to that.
Following the Houthi attack on Yemen after a calm in the war on Saturday, the military forces of KhalifaHaftar blocked a pipeline in Libya, which provided the connection of Libya's major oil fields to the coast.
Furthermore, the impeachment progress of Donald Trump remained under headlines on Monday when the lawyers of Trump called the impeachment as flimsy. White House also claimed that there was nothing wrong in dealing with Ukraine. However, the main proceeding will start on Tuesday. The USD/JPY pair could not give significant move on Monday amid the low volume of traders because of US Holiday.
USDJPY - Daily Technical Levels
|
Support |
Pivot Point |
Resistance |
|
110.11 |
110.17
|
110.22 |
|
110.08 |
110.25 |
|
|
109.99 |
110.34 |
USD/JPY - Daily Trade Sentiment
On Tuesday, the USD/JPY is trading with a bullish bias holding above a strong support level of 109.800. This level is extended by a double bottom as well as 50 periods EMA which is suggesting odds of bullish bias in the pair.
On the higher side, the USD/JPY is likely to find support around 109.800, along with resistance around 110.300. A bullish breakout of 110.300 can extend buying until 110.650. The Stochastic has entered the oversold zone, which is suggesting chances of bullish correction in the USD/JPY currency pair. Let's stay bullish above 110.17 and bearish below this level today.
USD/CAD - Sideways Trading Continues
The USD/CAD closed at 1.30463 after placing a high of 1.30719 and a low of1.30428. Overall the movement of the USD/CAD pair remained bearish throughout the day.
USD/CAD pair was dragged on Monday despite the US dollar strength across the board. The downward trend of USD/CAD was supported by the sharp rise in Crude oil prices after the blockage of the Libya pipeline.
In Libya, the military forces loyal to KhalifaHaftar blocked the pipeline, which was used to connect two major oil fields of Libya with the international coast. This was done to hold the supply of crude oil as international leaders were in a meeting in Berlin to discuss a peace summit on Libya.
The action by forces was followed by the attacks of Houthis on Yemen's mosque. Iran-backed Houthis attacked a mosque in Yemen on Saturday, which caused a loss of more than 100 lives and injured dozens of people.
Meanwhile, in Iraq, the production of crude oil was reported to stop after the protests escalated. The Al Ahdab oil field in Iraq, which is operated by China's CNPC, was blocked by security guards who were protesting against the absence of permanent employment contracts. The blockage of crude oil supply raised the WTI Crude oil prices on Monday, near $59 per barrel. The rise in Crude oil prices gave strength to the commodity-linked currency- loonie and dragged the prices of USD/CAD.
On the other hand, the Bank of Canada will have its policy meeting on Tuesday, where the bank is expected to keep policy unchanged. The decline in GDP's forecast by Bank of Canada suggested that the risks for Loonie are tilted towards downside; however, rate cut expectations are not high in the market.
As far as the US dollar is concerned, there was a Holiday of Martin Luther King Jr. Day in the United States, and there was no data published on Monday from the American side. So the movement of USD/CAD remained in the hands of Canadian data and crude oil movement.
USD/CAD- Daily Technical Levels
|
Support |
Pivot Point |
Resistance |
|
1.3037 |
1.3055
|
1.3066 |
|
1.3026 |
1.3084 |
|
|
1.2997 |
1.3113 |
USD/CAD- Daily Trade Sentiment
The USD/CAD is trading in a narrow range of 1.3095 - 1.3040 for another trading day. The USD/CAD's break of 1.3102/4 resistance level can confirm short term bottoming at 1.2951. Moreover, the mount should then be seen to 50 EMA (presently at 1.3127) and higher. On the lower side, violation of 1.2951 is likely to extend a larger decline to a 100% projection of 1.3564 to 1.3016 from 1.3327 at 1.2779 next. Let's do choppy trading until the USD/CAD comes out of the trading range.
AUD/USD – Double Bottom Support Eyed
The AUD/USD pair closed at 0.68715 after placing a high of 0.68882 and a low of 0.68548. Overall the movement of AUD/USD pair remained bearish that day.
Australian Dollar failed to capitalize on Monday and dropped to a one-week lowest point around 0.685 regions. The main reason behind the downfall of Aussie was the strength of the US dollar across the board. The upbeat US economic data over the last week raised the expectations that the US economy will continue to expand and reduced the chances of further rate cuts from the Federal Reserve.
Phase one of the US-China trade deal also failed to impress traders after there was no tariff rollback announcement from both sides in its details. The risks of global growth remained unchanged due to the persistence of tariffs on US & Chinese products.
Australia is the largest trading partner of China, was affected by the holding of tariffs, and delaying the removal of the tariff until phase-two of the trade deal. Australian Dollar came under pressure because of broad-based US Dollar strength, and hence the AUD/USD pair dropped on Monday.
Meanwhile, the geopolitical tensions remained under headlines where Libya and Iraq continued to weigh the market in the absence of any macroeconomic data. There was a holiday in the United States on Monday, and there was also no economic event from the Australia side, which left the AUD/USD pair to follow its previous day's movement.
The low level of trades also affected the movement of AUD/USD pair, and the pair continued to drop for 3rd consecutive day on Monday to the lowest level of 0.68548.
AUD/USD - Technical Levels
|
Support |
Pivot Point |
Resistance |
|
0.6856 |
0.6872
|
0.6889 |
|
0.6839 |
0.6805 |
|
|
0.6806 |
0.6939 |
AUD/USD - Daily Trade Sentiment
The AUD/USD is trading at 0.6865 after testing a strong support level of 0.6850. Closing of AUD/USD candles above this level can extend buying until 0.6880, while bearish breakout of 0.6850 can lead AUD/USD prices towards 0.6800 today.
Day trading sentiment in AUD/USD remained neutral initially, with a focus on 0.6849 support. The outlook is consistent that rebound from 0.6850 could have achieved with three waves up to 0.7031. Consider staying bullish above 0.6850 today.
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