The CADJPY pair fell to test support at 80.00 as the market awaits a rate decision from the Bank of Canada (BoC). Global stocks were also lower on Tuesday and this has seen safe-haven flows to the Japanese Yen.
The BoC is widely expected to hold rates steady at 0.25% in today’s meeting and traders will be watching the press conference for clues about the future path of the bank’s policy. The bank recently launched an online public consultation to gather a range of views on bank’s approach to monetary policy. The “Let’s Talk Inflation” campaign was part of an effort to reach out to Canadians before the Bank renews its frameworks. With the U.S. Federal Reserve recently renewing their commitment to inflation targeting we may see similar statements from the BoC, which could see gains in the Yen.
The Canadian economy has seen a good bounce in manufacturing over the last few months. Other indicators have been sluggish with inflation at 0.1% and unemployment still above 10%
Next week will see Japan’s new Prime Minister chosen and there has been talk of a snap election to gain public approval. The current front-runner is Shinzo Abe’s former right-hand man and this will be seen as a clean succession plan, which would have little impact on the Yen.
CADJPY Technical Outlook
CADJPY dropped 100 points yesterday to test the 80.00 level and this has seen the market move to the 50 day moving average and there are also support levels from August. If the pair gets below there then a move to 79.00 will align with price channel support. The Investing Cube team are currently available for Trading Coaching.
CADJPY Daily Chart