Japan’s revised GDP rate for Q4 24

The USD tended to weaken against its counterparts on Friday as the US employment report for February came in weaker than expected, disappointing traders. The NFP figure rose, yet not as much as the market expected, while the unemployment rate ticked up and the average earnings growth rate slowed down, all putting some pressure on the Fed to continue cutting rates, yet the next big test for the USD is expected to be the release of the US CPI rates for February on Wednesday and a possible slowdown of the rates could weigh on the USD further. North of the US border, Canada’s Employment report for February came in weaker than expected, adding pressure on BoC to cut rates on Wednesday’s American session, weighing on the CAD. On a fundamental level, the trade war with the US intensifies and also tends to weigh on the Loonie, while the Liberals elected former BoC Governor Mark Carney, as their new leader and seem to be rebounding in polls ahead of the national elections in Canada, in October.

On a technical level USD/CAD on Friday bounced on the 1.4280 (S1) support line. We tend to maintain a bias for a sideways motion of the pair for now, given also that the RSI indicator is at the reading of 50, implying a rather indecisive market. Should the bulls take over, we may see the pair breaking the 1.4465 (R1) resistance lien and start aiming for the 1.4665 (R2) resistance level. Should the bears take over, we may see USD/CAD breaking the 1.4280 (S1) support line and start aiming for the 1.4100 (S2) support level.   

In tomorrow’s Asian session, we note the release of Japan’s GDP rates for Q4 24 and a possible acceleration could provide some support for the Yen. Furthermore, we note that the market’s uncertainties especially those revolving around Trump’s tariffs tend to be supportive for the JPY on a fundamental level, given the Japanese currency’s safe haven qualities. Also on a monetary level, expectations for another rate hike by the BoJ tend to be enhanced thus providing support for the JPY. Hence we also note that JGB yields climbed to multi-year highs in today’s Asian session, after weak results at an auction.

USD/JPY bears took a break on Friday yet in today’s Asian session renewed its downward motion aiming for the 145.90 (S1) support line. We maintain a bearish outlook for the pair as long as the downward trendline guiding the pair since the 10^th of January remains in charge of the pair’s direction. Also, please note that the RSI indicator as reached the reading of 30, implying a strong bearish market sentiment for the pair. Should the bears maintain control over the pair as expected despite a possible correction higher, USD/JPY may break the 145.90 (S1) line and start aiming for the 141.75 (S2) level. For a bullish outlook we would require the pair to reverse direction, break initially the prementioned downward trendline in a first signal that the downward motion has been interrupted, break the 148.65 (R1) line and open the gates for the 151.35 (R2) barrier.    

Other highlights for the day:

Today we get Germany’s industrial output for January, Sweden’s GDP rate for the same month, Norway’s CPI rates for February and Euro Zone’s Sentix index for March. In tomorrow’s Asian session, we note the release Japan’s household spending for January, Australia’s business conditions and expectations for February, consumer sentiment for March and we highlight Japan’s GDP rate for Q4 24.

As for the rest of the week:

On Tuesday we get the Czech Republic’s CPI rates for February, and the US JOLTS job openings figure for January. On Wednesday we get Japan’s PPI rates for February, we highlight the release of the US CPI rates for February and we get from Canada, BoC’s interest rate decision. On Thursday we get Euro Zone’s industrial output for January, the US weekly initial jobless claims figure, the US PPI rates for February and Canada’s building permits for January. On Friday, we get UK’s GDP and manufacturing output rates for January and the US preliminary University of Michigan Consumer Confidence for March.

USD/CAD Daily Chart

• Support: 1.4280 (S1), 1.4100 (S2), 1.3945 (S3)
• Resistance: 1.4465 (R1), 1.4665 (R2), 1.4790 (R3)

USD/JPY Daily Chart

• Support:145.90 (S1), 141.75 (S2), 139.60 (S3)
• Resistance: 148.65 (R1), 151.35 (R2), 154.65 (R3)

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