CAD/JPY Forecast Today- 15/07: CAD Nears Key Support (Chart)
Date
7/15/2024 5:14:16 AM
(MENAFN- Daily Forex)
It's obvious that the CAD/JPY pair are approaching a major support level. This is an area that previously has been massive resistance previously, and therefore it's likely that we continue to see a lot of“market memory” come back into the picture. After all, the 50-Day EMA of course is an area that we had seen a lot of action at previously, and therefore I think it does make a certain amount of sense the buyers came in to try to pick up this market.
Furthermore, it's worth noting that the Bank of Japan has intervened in the currency markets on Thursday, and therefore it's interesting to see whether or not we see buyers coming back into take advantage of“cheap Canadian dollars”, or at the very least gives you the opportunity to start shorting the Japanese yen, which of course has a major issue behind it, as the Bank of Japan can only do so much as the debt load that Japan holds as far too much to raise rates on.
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Technical Analysis
The technical analysis on this pair is quite fascinating, because we are at roughly the 50% Fibonacci retracement level from the most recent surge higher, and of course we then drop down to the 50-Day EMA and bounce. If we can turn around a break above the top of this candlestick, then it's likely that we could go looking to the ¥119 level. All things being equal, this is a market that I think will continue to pay people to hang onto it due to the interest rate differential, and I think a lot of people would get involved at that point in time.
Ultimately, we are in a major uptrend, and that continues to be a major driver of where we go over the longer term. That doesn't mean that it won't necessarily be noisy in the short-term, but I do think that traders will continue to look at this through the prism of trying to find some type of value, which essentially is what everybody is trying to do in all of the Japanese yen related pairs.
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