CAD/JPY: A breather after a short-term rally
It’s speech time, and that often means ‘wait and see’. Mario Draghi from the European Central Bank gave his press conference last week and then delivered the opening address to the European Parliament on Monday. Now it’s time for the Fed’s Jerome Powell. At 7. p.m., GMT today we will hear the Fed Interest Rate Decision and the Fed’s Monetary Policy Statement. After that, at 7:30 p.m. GMT, the FOMC press conference. So it is likely volatility will drop during today’s trading as investors wait for news from the Fed.
If there are uncertainties about trading the US dollar, there is a possibility of switching to other currency pairs. An exciting pair is the Canadian Dollar against the Japanese Yen.
Although the CADJPY is more sensitive to market-wide sentiment changes than the USDJPY, it currently offers an interesting picture.
After a bearish downward rally since mid-October last year, the CADPY established a low of 78.48 at the beginning of the year. With only two candles, the market managed to lift itself back above the lows of March 2018. After this, the market consolidated in a channel.
The market should find support in the 82.00 range. If it goes through this downside, then the next support is waiting in the 80.25 area.
As a first upside target, the market could head for the upper limit of the channel, which coincides with a resistance line in the 83.40 range. If the market overcomes this level problem-free, then the next resistance is in the 84.76 area.
The MACD histogram shows a slight divergence. This may mean nothing,since the indicator shows falling values, but the highs in the price are only slightly higher. However, Technical Analysis teaches us that a divergence towards the indicator should be resolved.
CADJPY Daily Chart | Source: ActivTrader
Written by Daniel Schuetz, External Analyst
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