CADJPY On Watch
Price action in CADJPY is looking interesting here. Unlike themoves we are seeing elsewhere against JPY, CAD has failed to breakdown. On the backof last week’s rally in oil prices and given the residual upside risks in theoutlook for oil, CAD looks well placed to fend off the current JPY safe-havenrally.
The current move lower in CADJPY can be viewed as a correctivebull-flag pattern, suggesting room for an eventual breakout and continuation higher.Price is currently sitting back above the 99.09 level and while atop thismarker, there is room for a breakout higher with 102.17 the key level for freshlongs towards 105.33.
Keep an Eye On
With JPY currently firmer on weakened risk appetite, any shiftin this narrative should see JPY reverse lower near-term. Admittedly, potentialdrivers for a rebound in risk appetite look a little thin on the ground.However, just as we saw a late rebound in stocks last week, there is alwaysroom for a shift in positioning. Canadian CPI this week also has the potential todrive the pair higher. If prices are seen coming in above forecasts again, thiswill keep the focus on BOC tightening, lending support to CAD, particularlyagainst JPY given the BOJ’s continued easing stance.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.