CAD/JPY: Shooting Star Shows Potential Bearish Reversal

FXOpen

Canadian Dollar/Japanese Yen (CAD/JPY) closed last week with a classic shooting start candle on the daily chart, indicating potential bearish reversal.

Technical Analysis

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.

cadjpy-d1-capital-trust-markets

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.

Conclusion

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 Innovative Broker of 2022*. Choose from 50+ forex markets 24/5. Open your FXOpen account now or learn more about trading forex with FXOpen.

* FXOpen International, Innovative Broker of 2022, according to the IAFT

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Forex Analysis

Market Analysis: Gold and Commodity Currencies Resume Their Decline Market Analysis: EUR/USD Takes Hit While USD/CHF Surges Market Analysis: The Yen and European Currencies Headed to New Lows Market Analysis: US Federal Reserve Contemplates Future Interest Rate Hikes Amid Economic Resilience USD/JPY Analysis: For the First Time This Year, the Rate Exceeds 149 Yen Per Dollar

Latest articles

Forex Analysis
Commodities

Market Analysis: Gold and Commodity Currencies Resume Their Decline

Despite the fall in the US CB Consumer Confidence Index for September and the decline in new home sales for August yesterday, one could observe a strengthening of the dollar in major currency pairs. It is worth noting that in

Shares

AMZN Stock Analysis: 4 Reasons to Doubt the Bullish Outlook

After the Fed signaled last week that rates may be higher for longer than expected, the US stock market has received a strong bearish boost. And among the most vulnerable assets were technology stocks (considered risky). The NASDAQ index has

Financial Market News

Inflation Still Dogs the Economy: What Are the Central Banks Doing About It?

High inflation continues to grip European economies, putting central banks in a tight spot as they grapple with the triple dilemma of slowing growth, persistent inflation, and the impact of unprecedented rate hikes. In September, we witnessed a shift in

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.