Yen up/CAD down going into week

Then yen held its ground against a stronger dollar heading into the U.S. open, with the USD/JPY holding between the 100% Fibonacci extension taken from the May 19 and July 7 crests at 78.85 and at the 79.20 resistance level. Risk appetite remains on the defensive at the start of trade this week with global equity markets in a sea of red as ongoing concerns about the looming U.S. debt ceiling deadline and the sovereign debt crisis in Europe continue to weigh on sentiment. The losses come ahead of an EU summit this week where leaders will attempt to reach a consensus on how to contain the regions steepening debt problem. The yen remains supported on haven flows and may continue to hold this range for sometime noting a breach of topside resistance eyes the 76.4% Fibonacci extension at 79.45 and the 61.8% extension at 79.801. A break below interim support at 78.85 sees subsequent floors at 78.50 and the 78 handle.

Japanese yen key levels

Level/Indicator

Level

50-Day SMA

80.64

20-Day SMA

80.28

10-Day SMA

79.94

2011 JPY High

76.35

The Canadian dollar was the worst performer against the greenback an hour into U.S. trade with the USD/CAD exchange rate sliding 0.68%. Falling commodity prices and overall shift away from risk continues to see the loonie under pressure with the pair testing interim resistance at the 50% Fibonacci extension taken from the June 27th and July 12th crests at the 0.96-handle. A likely break here sees topside targets at 0.9620 backed by the 38.2% Fib extension at 0.9640 and 0.9690. Firm support for the pair rests at the key 61.8% Fib extension at 0.9560 with subsequent floors seen at 0.9535 and the 76.4% extension at 0.9510.

Canadian dollar key levels

Level/Indicator

Level

50-Day SMA

0.9712

20-Day SMA

0.9672

10-Day SMA

0.9615

2011 CAD High

0.9912

Michael Boutros, Currency Analyst for DailyFX.com is a Technical/Fundamental Analyst specializing in the FX markets.
E-mail: mboutros@fxcm.com

Twitter: @MBForex
WEB: www.fxcm.com

About the Author
Michael Boutros Michael Boutros, Currency Analyst for DailyFX.com is a Technical/Fundamental Analyst specializing in the FX markets. E-mail: mboutros@fxcm.com.
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