CAD/JPY – Direction Undecided At 3.5-Year High Level

#OPINIONLEADER# #Signal#

 JUN 7, 2021

• Canadian job losses continued into May
• OPEC+ optimism in oil market help cushioned weakness in CAD
• Strong conviction needed to break 3.5-year high

Chart 1: CAD/JPY H4 chart

Statistics Canada reported last Friday that 68,000 jobs were lost in May, close to three times more the forecasted figure of 23,500. Unemployment rate inched upwards as forecasted. The decline in jobs was a result of the third-wave COVID restrictions imposed across Canada. The Canadian dollar traded lower against some of the other major currencies but its weakness was brief possibly due to the positive outlook of the oil market from the recent OPEC+ meeting.

For the past one week, CAD/JPY has been ranging across within 75pips and was trading at a 3.5-year high of 91. At this point, a strong conviction will most likely be required in order for CAD/JPY to break above the 91 handle and present good buying opportunities. On the other hand, since CAD/JPY is trading close to the 90 handle, wait for it to break below that level before looking for selling opportunities.

Trade Setup for CAD/JPY (H4)

Buy Stop order at 91.500

Sell Stop order at 89.800

Upcoming major news that may impact price movement of CAD/JPY

09 June – Bank of Canada monetary policy decision announcement at 2200 (GMT+8)

16 June – Canadian CPI m/m data release at 2030 (GMT+8)

18 June – Bank of Japan monetary policy decision announcement at a tentative timing