USD/JPY and USD/CAD at Key Levels Awaiting News Catalysts

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The dollar is trading mixed against the major currencies as investors await important macroeconomic releases and foreign policy signals. Market participants remain cautious ahead of upcoming US data, as well as potential statements following contacts between Washington and Beijing. The trade negotiations factor and the prospect of a meeting between Donald Trump and the Chinese leader remain in focus, as any signs of progress or escalation could influence demand for safe-haven assets and the dollar’s trajectory.

Upcoming macroeconomic releases and developments in the US–China trade agenda will be decisive: either the dollar maintains its advantage and continues to strengthen, or the market shifts into a deeper correction from current levels.

USD/JPY

The USD/JPY pair showed a strong upward impulse at the start of the week and moved closer to recent highs. The rally reflects steady demand for the dollar and relative weakness of the yen amid stable expectations regarding Federal Reserve policy and the accommodative stance of the Bank of Japan. Additional support for the dollar comes from expectations surrounding US economic data, which may confirm the resilience of the American economy.

Should the data come in strong, the move towards fresh highs may continue, while weaker figures could trigger profit-taking and a short-term correction.

Key events for USD/JPY:

  • Today at 15:30 (GMT+2): US initial jobless claims;
  • Today at 17:00 (GMT+2): Speech by Federal Open Market Committee (FOMC) member Michelle Bowman;
  • Tomorrow at 01:30 (GMT+2): Tokyo core Consumer Price Index (CPI), Japan.

USD/CAD

The USD/CAD pair remains in a sideways phase. The pair tested the upper boundary of the range but encountered resistance and shifted into a moderate pullback. Technical analysis suggests a possible move towards the lower boundary of the medium-term range, as a “doji” reversal pattern has formed on the daily timeframe.

A confident break and consolidation above 1.3730 could allow the upward momentum to resume.

Key events for USD/CAD:

  • Today at 15:30 (GMT+2): Canadian wholesale sales;
  • Tomorrow at 15:30 (GMT+2): Canada GDP (q/q);
  • Tomorrow at 15:30 (GMT+2): US Producer Price Index (PPI).