CADJPY Bullish View
CADJPY is an interesting pair to watch as we kick off the new week. The retail market is holding a heavy 81% short position in the pair currently, suggesting plenty of room for the current rally to continue. CAD has been the strongest performer across early European trading on Monday. A better tone to risk sentiment and oil prices holding near highs is helping keep CAD underpinned for now. JPY, on the other hand has seen diminished demand due to weakened safe-haven inflow on the back of better US banking results late last week. Traders will be looking to further US earnings releases due today, and across this week, to help set the tone for coming days.
CPI On Watch
With CAD poised to benefit from any further improvement in the risk backdrop, and JPY likely to remain pressured, the pair has good potential for a fresh breakout this week. Traders will also be looking to tomorrow’s CAD CPI release for last month. While inflation has been falling steadily, leading the BOC to pause its tightening program, any fresh uptick in CPI still poses hawkish risks for the BOC with CAD likely to spike higher if any unexpected strength is seen.
Technical Views
CADJPY
The rally in CADJPY has seen the market breaking above the 99.09 level support, moving higher within a well-defined bull channel. With momentum studies bearish and retail heavily short, the focus is on a continuation higher near-term and a breakout above the 100.81 level targeting 102.17 next.
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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.