CADJPY trades 0.33% lower at 83.75 making fresh ten-day lows after the Bank of Canada sees a weaker growth in the near term. The central bank kept interest rates unchanged at 1.75% as was widely expected but the shift in the outlook is what is moving the Canadian dollar lower. Also BAC has removed the reference to interest rates being “appropriate” suggesting a more dovish stance than expectations. Bank of Canada will determine the future interest rate path following the developments in consumer spending, the housing market, and business investment.
CADJPY lost over 50 pips on the headlines hitting the daily low at 83.594, just to recover 15 pips after the dust settled down and ahead of the press conference. Japanese yen the last two days has attracted bids as investors turn their attention to safe haven assets after the coronavirus outbreak in China.
CADJPY is under heavy selling pressure after the Bank of Canada headlines. The outlook is still bullish for the pair despite yesterdays and today’s sharp correction.
On the downside initial resistance for CADJPY stands at 83.598 the daily low. More offers might emerge at 82.961.49 the 50-day moving average. A break below the 50-day moving average might cancel the bullish momentum and bears would push for the next support area at 82.371 the 100-day moving average.
On the other side the pair will meet resistance at 84.351 the daily top. Next hurdle to the upside stands at 84.428 the high from yesterdays session. A break above might drive the CADJPY up to 84.569 the high from January 17th.