The following are UBS' latest short-term (mostly intraday) trading strategies for USD/JPY, AUD/USD and USD/CAD.
USD/JPY: There has been a sharp USDJPY selloff and in the US dollar in general, as the market has re-priced the Fed's rate hike schedule. The real pain started below last Friday's low of 118.375, but equities have held up well and we think that in the short term there could be a bit of the squeeze. In the bigger picture, there could be more pain below 116, but at some point the BoJ might become vocal. S
AUD/USD: We can see this USD selloff extending a bit further, but prefer buying AUDUSD on dips rather than chasing the pair higher as there are decent resistance levels ahead at 0.7250. We would be surprised to see a break higher on the first attempt. Look to buy dips between 0.7120 and 0.7150, with a stop below 0.7050, targeting an eventual break higher towards 0.7325.
USD/CAD: has been trading heavy since the last BoC meeting and a decent amount of profit-taking has gone through. The market has been thin since the start of the year, with some pockets of liquidity in between; yesterday's 300 pip drop to 1.3757 reflects that. It feels like there is still more room to the downside; 1.3444 is the 23.6% retracement of the move up to 1.4691 from 0.9407. Look to sell rallies to the first decent resistance at 1.3900/1.3950.
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