Price action in CADJPY is looking interesting here. Following the heavy sideways action we’ve seen over the year so fa, price now looks to be breaking higher. We’ve seen price breaking out above the contracting triangle which has framed price action over the last six months. Price remains within a larger rising wedge formation and, with the market rapidly approaching the 92.74 level, there are breakout opportunities here for a run up to the 94.06 level initially, and the wedge pattern top above. The retail market is currently around 80% short the pair, suggesting plenty of room for the market to advance further near-term, in line with bullish MACD and RSI readings.
Keep An Eye On
The main driver for this pair is risk sentiment. Given CAD’s links to commodities prices and broader risk flows, and JPY’s safe-haven status, the pair is a great barometer of broader risk sentiment in the market. With the big focus on a potential ceasefire or truce between Russia and Ukraine this week, current optimism is driving the pair higher. If such a deal is agreed we can expect firmly higher prices. On the other hand, a breakdown in talks or an escalation in violence would likely see a sharp reversal lower.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.