This pair might be somewhat interesting since oil has been on a tear, but it has not managed to push this pair higher.
The CAD/JPY has been quiet for the last couple of days against the Japanese yen, as we continue to hang around the 50-Day EMA. This indicator eases quite often followed by longer-term swing traders, but it should also be noted that it is relatively flat now, showing that we are simply consolidating in a relatively quiet and tight range.
This pair might be somewhat interesting since oil has been on a tear, but it has not managed to push this pair higher. That’s interesting because the Canadian dollar is a proxy for the oil market, and the Japanese import 100% of their petroleum. As a rule, when oil markets take off to the upside, this pair will follow right along with it. So, the question now becomes whether this is a simple trade that needs to catch up, or if there’s something else afoot.
Regardless, there is a trend line just below that should come into the picture, and I think a lot of people will be paying close attention to it. If we can stay above the trend line, then I think it’s probably only a matter of time before you break above the ?107.50 level, opening the possibility of re-challenging the ?110 level like we did a couple of weeks back.Breaking above that region allows for a longer-term move to the upside, but I think we need to see that the Bank of Japan is not going to get involved again.The US dollar continues to climb quite steadily against the Japanese yen, which of course is the standard by which a currency is measured. If that market does not move too rapidly, then I believe this market could continue to grind higher.
Auto break down below the ?104 level, we could see a bit of a pullback, perhaps down to the 200-Day EMA, which is currently near the ?102 level. I don’t necessarily see that happening, but it is one possibility that we need to pay attention to. Over the last couple of days, this has been a relatively quiet market, but I think a lot of that has to do with the Bank of Japan frightening people couple of weeks ago.