Canadian Dollar/Japanese Yen (CAD/JPY) closed last week with a classic shooting start candle on the daily chart, indicating potential bearish reversal.
The pair closed last week at 94.02, well below the 50% fib level resistance, 100 Daily Moving Average (DMA) and 200 DMA. The price is expected to face huge hurdle near the 94.80-95.00 resistance area, a break and daily closing above the 95.00 handle could push the pair again into stronger bullish momentum, validating a rally above the 98.00 milestone in medium term.
On the downside, the pair is likely to find support around 93.83, the 38.2% fib level, ahead of 92.57 that is the 55 DMA and 23.6% fib level. The short term bias will remain bullish as far as the price remains above 90.60 as per swing analysis.
Canadian Employment Reports
On Friday, Statistics Canada revealed that the unemployment rate in Canada ticked down to 6.9% in March as compared to 7.0% in the month before, analysts had predicted a steady reading of 7.0% hence the data upbeat the expectations. CAD/JPY fell despite the upbeat Canadian report which shows some serious selling pressure.
BoJ Monetary Policy
On Tuesday, April 08, the Bank of Japan (BoJ) is going to release the monetary policy statement and interest rate decision. According to the forecast of economists, the central bank is expected to keep the monetary policy unchanged, thus the Japanese Yen (JPY) might show relief rally consequently accelerating the bearish pressure on CAD/JPY.
CAD/JPY is expected to take retracement from the current levels. The pair might fell as low as 92.60. So selling the pair with a stop loss at the high of the shooting star could be a good strategy. The target might be around 92.60.
Trade global forex with the best ECN broker of 2021*. Choose from 50+ forex markets 24/5. Open your FXOpen account now or learn more about making your money go further with FXOpen.
* FXOpen International, best ECN broker of 2021, according to the IAFT