Are we finally seeing retracement opportunities on the yen pairs?
I’ve got my eye on this CAD/JPY pullback ahead of the Canadian CPI release.
Before moving on, ICYMI, yesterday’s watchlist checked out AUD/USD’s descending trend line correction. Be sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
Japanese trade deficit at 0.90T JPY vs. projected 0.58T JPY shortfall
Japanese deputy chief cabinet secretary says FX stability is important
BOJ intervened in bond market thru unlimited fixed-rate JGB purchases
Australia’s MI leading index dipped from 0.4% to 0.3% in March
Shanghai official reports a downtrend in COVID-19 cases over the past days
Japanese tertiary industry activity sank 1.3% vs. projected 0.3% uptick in Feb
German producer prices jumped 4.9% vs. expected 2.7% gain, previous 1.4% increase
Upcoming Potential Catalysts on the Forex Economic Calendar:
Canada’s CPI report at 12:30 pm GMT
U.S. existing home sales at 2:00 pm GMT
U.S. EIA crude oil inventories at 2:30 pm GMT
New Zealand CPI at 10:45 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: CAD/JPY
This pair has been on a tear lately, but it looks like a Loonie bulls are taking a quick breather. This means that a correction opportunity might be popping up!
Which levels should you be keeping tabs on?
If you’re bullish on CAD/JPY, stay on the lookout for a test of the Fibonacci retracement levels near its rising trend line on the hourly time frame.
In particular, the 61.8% level is right smack in line with this support area and the 101.00 major psychological mark. A shallow pullback could already find buyers at the 38.2% Fib around 101.60 or the 50% level near 101.30, so keep your eyes peeled for reversal candlesticks, too.
Stochastic still has room to head south before reflecting exhaustion among sellers, so the correction could keep going for a while. The uptrend is more likely to resume than to reverse anyway, at least according to the moving averages.
Of course don’t forget to check out the release of Canada’s monthly CPI, which is expected to show another increase in price pressures for March. Stronger than expected results might be enough to put CAD/JPY back on its uptrend once more.
Besides, the BOJ is already on intervention mode after weeks of jawboning the yen, so the Japanese currency might face more downside from here.
