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Shorting currencies: USD/JPY, USD/CAD or USD/CHF?

June 2, 2020 21:37
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USD/CAD, USD/CHF, USD/JPY,

Economic reopenings in Europe and civil unrest in the US-dominated the headlines connected with the FX market. In this short selling article, we will talk about the latest important news on the currency market and about short-selling candidates. Shorting is a popular trade technique among numerous traders, gamblers, and individual investors and speculators. Markets are easily affected by unpredictable events, and most traders are now taking advantage of declining needs. The market continues to dump the US dollar amid riots in the US getting worse day by day. It is also important to mention that the US President Trump threatened to use more military to end riots. On the other side, EUR is finding support in economic reopenings, as coronavirus-related numbers continue to decrease. This Wednesday the US will publish the official ISM Non-Manufacturing PMI while the EU did not release important macroeconomic figures this week. Below are a few of the most interesting currencies for short selling in the beginning of week 23.

USD/JPY
The US dollar remains the weakest currency on the FX market as tensions in the US spook investors. The dollar suffered ever since the week started amid protests spreading across the US and turning more violent over the last 24 hours. Despite this, the USD/JPY pair is still not able to reach its full “short” potential because the Japanese Yen is generally weaker this week, as investors are optimistic about economic reopening throughout Europe. It is important to mention that Japan published its Monetary Base this week, which expanded by 3.9% YoY in May, better than the 2.1% expected. Early Wednesday, the country will release the May Jibun Bank Services PMI, previously at 21.5.

USD/JPY: Support & resistance
The USD/JPY is still trading above 108.00 level although the sluggish dollar’s demand will likely prevent it from breaking higher. On this chart (the period from March 2020), I marked major support levels that can help traders to understand where the price could move. The current support level is 108.00 and if the price breaks this level it would be a “SELL” signal and we have the open way to 107.50 and 107.00. If the price breaks 106.00 which represents very strong support, the next target could be located around 105.00. The US central bank sees a “strong” economy while the political concerns will remain at the forefront for investors. Try Markets for shorting USD against JPY!

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USD/CAD
The USD/CAD pair weakened and posted its lowest close since early March at 1.3520. The bearish pressure surrounding the pair remained intact this week amid rising crude oil prices and broad USD weakness. The US Dollar vs. the Canadian Dollar is a very popular currency pair due to the extremely large amount of cross border trading that occurs between the U.S. and Canada. Canada heavily depends on exports to the US and political concerns also represent the negative sentiment for Canadian Dollar.

USD / CAD: Support & resistance

Crude oil advanced up to $36.56 and this currency pair could weak even more in the upcoming days. On this chart, I marked support and resistance levels, 1.3600 (resistance) and 1.3400 (support). The pair has a short-term support area at 1.3500 and it would take a break below this level to confirm a new leg lower towards the 1.3450 level. If the price breaks 1.3400 support that would be a strong “SELL” signal and the open way to 1.3300 level. You can go short in USD/CAD at Skilling!

USD/CHF
The USD/CHF, also known as the “swissie” is the fifth most traded currency in the Forex market. This currency pair is considered to a safe haven pair due to its stability and neutral character of Switzerland and is a reserve currency used by markets worldwide. Economic reopenings in Europe and civil unrest in the US-dominated the headlines connected with this currency pair. The US dollar remained under strong selling pressure against its high-yielding rivals but managed to stay neutral against those considered safe havens. The USD/CHF pair needs to fall below 0.9550 level to extend moves lower and according to the fundamental analysis and current market sentiment, the direction for USD/CHF remains „neutral-to-bearish“.

USD/CHF: Support and resistance
The USD/CHF is still trading above 0.9600 level although the sluggish dollar’s demand will likely prevent it from breaking higher. On this chart (the period from March 2020), I marked major support levels that can help traders to understand where the price could move. The current support level is 0.9600 and if the price breaks this level it would be a “SELL” signal and we have the open way to 0.9550 and 0.9500. If the price breaks 0.9500 which represents very strong support, the next target could be located around 0.9400. On the other side, if the price breaks 0.9700 we have an open way to 0.9800 resistance level. The pair could correct lower, but bears will have little chances as long as it holds above 0.9500. Get your own investment or trading platform for shorting USD/CHF at MarketsX!

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