CAD/JPY Forecast Today - 16/07: CAD Drops Vs Yen (Chart)
Date
7/17/2024 3:31:56 AM
(MENAFN- Daily Forex)
I recognize that during the trading session on Monday, we have seen the Japanese yen strengthen against multiple currencies, including the Canadian dollar. With this, I think you've got a situation where traders are trying to do everything they can to prepare for an uncertain market, but we also have a lot of technical analysis features that suggests this is an area where value hunters may return.
Technical Analysis
Looking at the technical analysis, it's obvious that we are close to the 50-Day EMA, an area that a lot of people would be paying close attention to due to the fact that it is one of the most widely followed momentum indicators. With that being said, I like the idea of buying this pair, but I also need to see a little bit of momentum reenter the market. Because of this, I will be looking for signs of momentum, and perhaps a break above the crucial ¥116 level to start buying.
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I will also look to other yen related pairs, because the yen tends to move in a similar fashion against multiple currencies at the same time. For example, if the USD/JPY pair starts to take off to the upside, it should have a little bit of a“spillover effect” in this market. After all, the Canadian dollar is of course a North American currency, which also gives it some similarity to the greenback when it comes to trading against Asian currencies.
Underneath, I see a lot of support near the ¥115 level, and I think that is an area where a lot of people would be interested in trying to pick up a little bit of value. This is a market that does tend to be very volatile at times, and of course also can have a little bit influence from the oil markets as well, as the Canadian dollar is often used as a proxy for crude oil. Because of this, this is a great currency pair to trade if you are looking at the oil market in relation to what's going on in Japan. Furthermore, keep in mind that the interest rate differential still favors Canada.
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