CAD JPY

Weaker oil prices could be a headwind to CAD/JPY, as could the increasing odds the BOJ move towards their next hike. So the fact that momentum turned lower on CAD/JPY around the 200-day SMA could be a bad omen for bulls.

The CAD/JPY trend has turned negative following this week’s big rally in the yen, while the USD/CAD will be in focus with the release of key US data in the coming days.

Bitcoin momentarily touched a record high before reversing lower in spectacular fashion, weigh in risk and sending the Japanese yen broadly higher.

USD/CAD continues to hold a range inside of a range, but CAD/JPY is bristling at resistance after having set a fresh 16-year high last week.

The Japanese yen has finally found some much needed support this week. It is all to do with the falls in global bond yields, and the unwinding of carry trades. US yields slumped earlier this week after US CPI fell more than expected, cementing expectations that the Fed (and other central banks) will no longer raise rates further

USD/CAD extended a bullish breakout this week while starting re-test of the 1.3500 psychological level. Bulls held the move despite US CPI coming in below expectations and CAD/JPY retains breakout potential given an ascending triangle formation. EUR/CAD on the other hand may offer some pullback potential given a hold at a key Fibonacci level of resistance.

CAD/JPY has piqued our interest ahead of today's economic data, which includes PMI's for Europe and the US and Canada's inflation and retail reports.

A 25-basis-point hike is expected

A combination of favourable yield differentials, higher oil prices and a bullish consolidation on CAD/JPY suggest it could break to new highs in due course.

Fundamental trends show no imminent signs of reversing, but CAD/JPY’s chart nonetheless suggests that there may be an opportunity for one or both of these currencies to reverse some of this year’s moves.

Back in October, we highlighted the potential for yen pairs to correct from their overextended highs. We think those corrections are nearing an end.

Previously we called for a retracement across yen pairs, but today we suspect many of them are close to (if not, have already seen) their corrective lows.

The trouble was that it surprised nobody, so at the time of writing NZD is trading lower for the day. Still, it’s RBNZ’s first hike in 7 years so it's worth mentioning.