Elaine is walking point butts today!
Forex price action has been relatively muted in recent trading sessions as traders wait for it Keep a close eye on reports such as the US Consumer Price Index and the Bank of England’s policy decision.
However, the Canadian dollar lost some pips, thanks to a bit of profit-taking and Crude Oil fell again.
Meanwhile, the Japanese yen is gaining after Bank of Japan Governor Ueda said he plans to scrap the central bank’s Yield Curve Control (YCC) program once members see persistent signs of inflation hitting their targets.
CAD/JPY currencies for 15 minutes Planned by TV
CAD/JPY is trading near the weekly open price, after reaching higher levels near the 101.35 handle which is in line with the R1 of today’s standard pivot point.
More importantly, the pair is forming a head and shoulders pattern on the 15-minute time frame.
Will we see a short-term reversal today?
Aside from the rejection at R1, the failure of CAD/JPY to breach the 101.35 area also means that the 101.40 area which was of interest in early May has held as resistance for another day.
I wouldn’t rule out a continuation of Friday’s rally though.
For one thing, the CAD/JPY is close to the 200 SMA which lines up with today’s S1 (100.60). Not only that, but the CAD/JPY also has a bullish divergence on the chart.
Unless we see catalysts that could push risky assets higher, I would bet the Japanese Yen will see further gains and the Canadian Dollar will be affected by lower crude oil prices.
I will wait for a clear breakout of the 101.60 support before targeting areas of interest like 100.25.
In the absence of market action catalysts seen, the CAD/JPY could maintain its current range.
The pair could bounce from the 3-day support near 100.70 and retest the previous inflection points near 101.40.
Whichever direction you choose to trade, make sure you know Average daily fluctuations for the Canadian Dollar/Japanese Yen pair And that you are practicing your best risk management moves!
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