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Forex outlook: CAD/JPY, EUR/AUD and USD/CHF

This Forex market outlook will look at CAD/JPY, EUR/AUD, USD/CHF and explore the current trading opportunities.

The last year was difficult for many fiat currencies but the US dollar. Almost all currencies rapidly declined against the US dollar. Yet, some other currency pairs that do not include US dollar still offer interesting possibilities. Which are they?

CAD/JPY is pushing higher

CAD/JPY is in an uptrend throughout the whole year as the Japanese yen is one of the worst-performing fiat currencies so far. Currently, this currency pair is in a bullish trend channel that could push CAD/JPY even higher, but it could also drop downward. 

Related article: AUD/USD strengthens after jobs data, US claims

Now CAD/JPY offers a solid opportunity after JPY gained against all currencies on Friday. This was a brutal long squeeze as the currency pair crashed by more than 3% along with USD/JPY. Now, as CAD/JPY is nearing the trend line, it could offer a nice buying opportunity with a profit target to the upper side of the channel at approximately 114.7.

CAD/JPY daily chart, source: tradingview.com

However, traders need to stay cautious as the yen declined extremely this year and the Bank of Japan (BoJ) will probably interfere to strengthen its currency. No need to fight against the trend yet, but if CAD/JPY starts to fall and goes below level 104.55, it might be the end of this uptrend as the uptrend channel would be broken. The next few days will decide the future trend. 

EUR/AUD pullback opportunity

After EUR/AUD tumbled at the beginning of 2022, it formed an exemplary double bottom in September. Later on, this currency pair broke the neckline upward and now offers a pullback opportunity. This is an excellent zone as EUR/AUD always reacts to this level. Moreover, this trading signal is supported by other tools.

When EUR/AUD gets to support 1.532, it will also be close to a trend line, which brings an opportunity to jump on a trend. This buy signal is also supported by divergence, but it is not confirmed yet. When EUR/AUD bounces back up from this level, it could rise by hundreds of pips with a minimal stoploss.

EUR/AUD daily chart, source: tradingview.com

USD/CHF on the crossroads

USD/CHF did a beautiful false breakout above an essential resistance of 1.0067, a little above parity. Then it turned sharply by almost 200 pips. Now it begs the question of whether this is the perfect spot to short this currency pair or whether the trend will continue. This will be decided in the next few days.

Also read: Where to invest for a profit during a recession?

There is a clear uptrend, but Friday’s reaction looks very bearish. If the trend line is broken, a downtrend is confirmed and traders can short the market with a potential for a few hundred pips. However, USD/CHF can still bounce from the trend line and head to resistance above 1.02. That is why you should look for confirmations on lower timeframes, such as hourly or four-hours (H1 or H4). 

USD/CHF daily chart, source: tradingview.com

Bottom line

Technical analysis is less valid nowadays than it used to be as currencies are mainly manipulated by central banks, but there are still signs we can read clearly from the chart. Be aware of the potential risks and be careful when placing your trades. 

I got into financial markets by accident in 2012 and started with Forex trading. Later in 2017, I started investing in stocks in cryptocurrencies and began writing articles profess...

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