Consolidation is still the name of the game for this forex pair as it bounced off its range support again.
Can it go for another test of resistance or perhaps a break higher?
CAD/JPY 1-hour Forex Chart by TradingView
CAD/JPY has been pacing back and forth between support at the 111.15 mark and resistance around 112.25.
After a sharp drop, the pair still managed to keep its head above the range bottom and might now be setting its sights back on the top again.
But will this week’s set of catalysts keep it afloat?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on the Canadian dollar and Japanese yen, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
In the past weeks, the oil-related Loonie was able to draw some strength from the commodity, even though the BOC recently shifted to a less hawkish stance. A fresh round of geopolitical conflict over the weekend might spur further supply concerns for crude oil and therefore keep prices elevated.
If that’s the case, stay on the lookout for a sustained move to the range resistance or at least until R1 (111.88) near the 112.00 major psychological mark. Stronger bullish momentum might even take the pair for an upside break to R2 (112.55) then R3 (113.07).
On the other hand, stronger safe-haven flows might favor the lower-yielding yen and trigger a range breakdown to S1 (110.70) then S2 (110.19).
Just don’t forget to take the average CAD/JPY volatility into account when trading this one!