Analysis of USD against CAD & JPY
The FOMC meeting is the highlighted event in this week. Financial world Forex, Gold and equity markets are preparing for Wednesday. I would request traders to close their pairs related to USD before the FOMC meet. Wild moves are expected. The USDX is moving in line with the expectation of a rate hike. If we dodn't hear about the rate hike, it means correction for the USDX and USD related pairs. Everyone eyes on the patience word. Some economists expect that the Federal Reserve can pause in being patient. A rise in USD had negative impact on the US economy. We think the the Federal Reserve is likely to hike interest rates by 0.25% in June or September. Today, traders eye industrial production and NAHB housing market index. We expect an uptick from industrial production with maximisation of capacity utilisation.
USD/CAD
The pair breached the previous high of 1.2798 but was unable to close above that level. Today, early at the Asian session, the pair has been unable to breach 1.2824.This is not a good sign. Bulls are on a safe side in case the price will close above 1.2800 on a daily basis.Bulls and bears are waiting for Wednesday. Intraday support is likly to be found at 1.2760 and 1.2730. Weekly support is seen at 1.2680 and 1.2620. Intraday resistance is seen at 1.2800 and weekly is likely to be found at the level of 1.3000. Bulls must close above 1.2800 as soon as possible. Bulls can challenge 1.3000 and 1.3250 in case prices close above 1.2800. We advised caution near 1.3000 odd level, as it's a multi-month resistance.
USD/JPY
The BoJ monetary policy is due for release on Tuesday. Oil prices continue to stay under pressure. At the Asian session, the yen is trading higher against the US dollar ahead of the data release. The price is consolidating at a 8-year high. Intraday support was found at 121.20 and 121.00. We still opt to recommend buying on every dip. Now, we are revising the targets at 124, 125.00, and 125.75. The prices are making higher lows and higher highs on the h4 chart. Support has climbed from 119.80 to 121.00. It's a good sign for further room for upswing. If the price closes above 121.85 on a weekly basis, we can see 128.00 as well. It's an one-side move all the way to new highs. Another upswing looms above 122.0 with targets at 123.00 and 123.20 in a day or two. Later, 124.00 and 125.00 are expected. Until a h4 candle closes above 120.80, a long trade remains in play. The overall picture favours buying on dips.
Key levels to watch- Must close above 121.85
Trade: we remain buyers.
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