The Canadian dollar remains somewhat rangebound ahead of the Bank of Japan decision. Are we getting ready to see a move in the next few days?
CAD/JPY
The Canadian dollar initially fell against the Japanese yen during the trading session on Thursday as the world waits for the Bank of Japan and its interest rate decision coming out overnight. Ultimately, this is a market that will remain a bit cautious, I suspect.
In the meantime, as traders try to determine what happens next, the behavior of the Japanese central bank will be monitored quite closely as we try to determine whether or not interest rate hikes truly are coming from a longer-term standpoint.
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There's also something else worth paying attention to in this market
The conflict in the Middle East has kept a bit of a bid in the crude oil market. With that, the Canadian dollar has had a bit of a boost in general against multiple other currencies, and I do find a trade against the Japanese yen to be very interesting due to the fact that the Japanese, of course, have to import all of their crude oil.
That makes quite a bit of difference in how this particular trade pays and plays out, as money will flow to Canada for that petroleum. This is a market that has been stuck in a 150-pip range over the last couple of weeks, and I'll be watching to see if it can maintain that, with the ¥110.50 level on the bottom offering support and the ¥112 level on the top offering resistance.
The 50-day EMA is getting fairly close to crossing below the 200-day EMA, kicking off the so-called death cross, but that's an indicator that is quite often late to the party. This is all going to be about the press conference in Tokyo.
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