AUDUSD, “Australian Dollar vs US Dollar”

As we can see in the H4 chart, after completing the descending wave, AUDUSD is correcting towards 61.8%. In the future, the price is expected to finish the pullback and resume falling to reaсh 76.0% fibo at 0.6732. However, the key downside target is the fractal low at 0.6670.

The H1 chart shows more detailed structure of the current correctional uptrend, which has already reached 38.2% fibo. Despite the local decline towards the low at 0.6769, the pair may yet form a new ascending impulse to reach 50.0% fibo at 0.6849.

USDCAD, “US Dollar vs Canadian Dollar”

As we can see in the H4 chart, USDCAD continues forming the ascending tendency towards fractal highs at 1.3346 and 1.3386. After breaking 76.0% fibo at 1.3274, the pair has formed a local support there. At the same time, while the pair is moving towards the highs, there is a divergence on MACD, which may indicate a possible pullback soon.

In the H1 chart, the pair is starting a new correction to the downside with the targets at 23.6%, 38.2%, and 50.0% fibo at 1.3295, 1.3275, and 1.3259 respectively.

USDJPY stopped falling on Wednesday, but the decline potential remains.

The Japanese Yen stopped falling against the USD in the middle of the week. The current quote for the instrument is 108.54.

Demand for the Japanese currency may return at any moment: the US President Donald Trump yesterday once again threatened China to introduce more import tariffs if the trade agreement wasn’t signed on conditions favorable to the White House.

In the morning, Japan reported on the Trade Balance in October, which showed that the Export plummeted by 9.2% y/y. The indicator has been decreasing for the eleventh month in a row, and that’s the longest period since 2016. The components of the report show that key contributions to the current decline were made by raw materials (-16.5%), manufactured goods (-13.4%), machinery (-12.9%), chemicals (-9.7%), electrical machinery (-8.3%), transport equipment (-7.4%), and foodstuff (-5.2%).

More than half of the Japanese export goes to Asian countries, so among the main trading partners in Asia, exports were mainly dragged by sales to China (-10.3%), Korea (-23.1%), Singapore (-14.6%), and Thailand (-14.6%). The Export to the USA lost 11.4% y/y.

The Import in Japan plunged by 14.8% y/y, although market expectations implied -16.0% y/y.

As one can see, the outside pressure on the Japanese economy is growing: the country is very export-oriented and that’s making it suffer due to global trade wars. All previous delivery schemes, investments, and trade mechanisms stopped working, thus having a negative impact on the Japanese trade balance. As long as the USA and China continue their talks, the situation for Japan will get worse.