CADJPY is trading lower on its daily time frame, with a descending trend line ready to connect the recent highs of price action. The pair is still on its way to testing the falling resistance area, which lines up with the 61.8% Fibonacci retracement level.
Stochastic is already indicating overbought conditions, which suggests that sellers could hop in anytime soon. Meanwhile, RSI is still heading north, indicating that the correction wave isn’t over yet.
The trend line is also near an area of interest at the 93.00-95.00 levels, which have held as support in the past. If this holds as resistance, CADJPY could make its way back down to the previous lows at 87.50. The 100 SMA is below the 200 SMA, confirming that the long-term downtrend is likely to carry on, with the shorter-term SMA currently holding as dynamic resistance.
CADJPY Fundamental Factors
Earlier this week, Japan released a weaker than expected current account balance of 0.78T JPY versus the projected 1.50T JPY Figure, reflecting a likely slump in trade activity. The Economy Watchers sentiment index came in line with expectations, though.
There haven’t been any major reports out of Canada so far this week, but last week’s jobs release exposed weaknesses in the country’s labor market. The report indicated a sharp surge in part-time hiring once more, which suggests that long-term employment is still far from recovering and that a decline in positions might be seen soon.
Japanese core machinery orders and PPI will be up for release on Thursday while Friday has the revised industrial production and tertiary industry activity index on tap. There are no major reports due from Canada, which suggests that the Loonie could take its cue from oil prices and market sentiment, which has been favoring risk-off flows these days.
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