CADJPY Keeps Going
The recent CADJPY breakout idea has now hit its second target. Price has made a more than 5% move higher over the last week as risk appetite rebounds. CAD, along with other higher-yielding currencies, has benefitted from better risk sentiment, while JPY has seen a sharp move lower amidst weakened safe-haven inflow. Additionally, the divergence in central bank policy expectations between the BOC and BOJ has been thrown back into focus, with the market bracing for further BOC hikes in the coming month, likely to keep CAD well supported.
With the retail market heavily short the pair and with both MACD and RSI firmly bullish, there is room for the current move to continue. For those holding longs, look to maintain bullish view towards 97.45 while 94.06 holds as support.
Keep An Eye On
The current risk backdrop looks likely to remain the most important driver for this pair. While risk appetite remains buoyant, expect CAD to continue to find demand, with JPY expected to stay weak on reduced safe-haven inflow.On the data front, little of note for CAD. JPY sees BOJ meeting minutes and PMI sets later in the week, though unlikely to do much to impact JPY given the current market themes.
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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.