Recent technical analysis reports indicate continued bearish pressure on the US dollar against major currencies, specifically the Japanese Yen (JPY) and the Canadian Dollar (CAD). The USD/JPY pair has reversed down from a strong resistance zone around the 158.00 level, a level that has acted as a barrier multiple times since the start of the year. This reversal was confirmed by the formation of a daily Japanese candlestick reversal pattern known as Dark Cloud Cover, which previously halted impulse waves v and 3.
Given the strength of this resistance and the prevailing bearish sentiment toward the US dollar in foreign exchange markets, analysts expect USD/JPY to fall toward the next key support level at 154.460. This level has historically stopped earlier corrective waves labeled a, iv, and ii.
Simultaneously, the USD/CAD pair has broken below the pivotal long-term support level of 1.3740. This level had been reversing the pair's price action since August, halting multiple waves over recent months. The breakout is anticipated to accelerate the active intermediate impulse wave (5), which is part of a longer-term downward impulse sequence that began in early November.
The analysis attributes this move to a clear daily downtrend, a bullish sentiment for the Canadian dollar, and a strongly bearish outlook for the US dollar. Consequently, the USD/CAD pair is projected to decline further toward the next significant support level at 1.3600, which has reversed price action multiple times since June.
