Today, at 5:00 pm (GMT +2), the Bank of Canada will publish the Overnight Rate, which represents short-term interest rates, and is pivotal to the overall pricing of the Canadian Dollar in the global markets. Let's look at how the markets are faring ahead of the BoC rates release.
CAD/JPY is under attack
2019-11-11 • Updated
SELL 84.10; TP 83.40; SL 84.40
CAD/JPY failed to close last week around the high of 85.20 and, as a result, remained capped by the 50-week MA in the 84.53 area.
On Monday, the pair closed away from the daily lows but still below the 100-day MA at 84.00 and February support line. The weekly pivot point is located at 84.33, so bears will prevail as long as the pair’s trading below this level. Given all mentioned above, we think that there’s a sense to bet on the decline of the Canadian dollar versus the Japanese yen. The proposed entry level is near the 50-period MA on H4 (84.13)
Bear in mind that volatility will rise on Wednesday, as Canada releases the trade balance figures and the Bank of Canada holds its meeting.
On January 12, the Bureau of Statistics will publish the Consumer Price Index (CPI) figures, a key index for determining interest rates. While we await the release, experts forecast a decline in the CPI data, a hint at weaker Dollar values in the global markets.
Later today Tiff Macklem, the governor of the BoC (Bank of Canada) is expected to speak at the Riksbank's International Symposium as part of a discussion panel on 'Central Bank Independence'.
The first FOMC meeting comes after a buildup of anticipation from traders and investors alike, as the markets await what posture the Fed will take regarding the interest rates; would there be a hike or a cut in interest rates?
Western countries are trying to find other options for oil and gas supplies after a 10th package of sanctions, which will put more pressure on Russian oil and decrease global oil supply. Italy, for example, is in talks with Libya.
Last year was tough for the Japanese yen. USDJPY gained more than 30% over 2022, striking above 150 in October. While anticipation of slower Fed rate hikes pulled the pair below the 130 level at the start of 2023, the speculations over the destiny of BOJ’s yield control policy grabbed the attention of the Japanese assets in the middle of January. What lies ahead for traders of the Japanese yen?