The CAD/JPY pair bounced hard during the session on Wednesday, using the 95 level as work. That being the case, the market looks as if it has respected the previous break out, and that break out has shown that the former resistances now support. With this, I believe that the market should be free to go much higher. Interestingly enough, this market does tend to move based upon oil prices as Canada is a major exporter, and Japan imports 100% of its oil, so the fact that the oil markets look very weak at the moment is a bit counterintuitive.

Nonetheless, the charts don’t like, and price is really the only thing that matters. With that in mind, I am looking to buy this pair on a break above the range for the session on Wednesday, thinking that this market will probably first head to the 96 handle, and then possibly 100 given enough time. We all know that the Bank of Japan certainly once the Yen to fall in value, so certainly the Japanese central bank won’t get involved.

If oil bounces, that could be the catalyst continue buying.

Watch the WTI Crude Oil markets for a possible hand as to whether or not this market is going to go higher. Even though we have been a bit disconnected lately, I feel that ultimately if the oil market goes higher, that will only boost chances of this market gaining. That gain would be enough to only add the pressure going higher, and ultimately I think we could be setting up for that exact move.

Regardless though, I am willing to buy this pair on the simple break higher. Oil isn’t always the only driver, it’s just something that’s going to add to the pressure. I have no interest in selling this market at the moment, as it certainly looks more prone to go higher than lower. In fact, it is not until we break below the 92 handle that I can consider selling this obviously bullish pair at the moment.

CADJPY 71014

Related Articles
  1. Personal Finance

    Salary Secrets: What Is Considered a Big Raise?

    A 4% or 5% annual jump in pay may not sound huge, but in today’s environment, it actually means you’re faring better than most.
  2. Retirement

    6 Steps to Update or Change Your Will

    Life changes – a new marriage, the birth of a child – can necessitate changes in your will.
  3. Insurance

    What Does It Cost To Raise a Child in America?

    Having a family can be an expensive proposition, but couples who know the numbers can strategize to lower the costs.
  4. Bonds & Fixed Income

    Calculating Yield to Worst

    Yield to worst is the lowest possible yield on a bond that may be called in the future.
  5. Economics

    What Does Vesting Mean?

    Vesting is the process of accruing non-forfeitable rights.
  6. Economics

    Understanding Retail Banking

    Retail banking refers to the mass-marketed, consumer-oriented products and services offered by the local branch of the commercial bank.
  7. Investing Basics

    Explaining Foreign Exchange Risk

    Foreign exchange risk is the chance that an investment’s value will decrease due to changes in currency exchange rates.
  8. Economics

    What Happened at the Fiscal Cliff?

    The fiscal cliff refers to a scenario on December 31, 2012, in which the Bush-era tax cuts were set to expire.
  9. Economics

    Explaining Enterprise Resource Planning

    Enterprise resource planning (ERP) is management software that integrates a business’ essential departments.
  10. Investing Basics

    What's Current Portion of Long-Term Debt?

    The current portion of long-term debt is the part of a company’s long-term debt that must be repaid within the next year.
  1. Sticky Wage Theory

    An economic hypothesis theorizing that pay of employees tends ...
  2. Cost Of Funds

    The interest rate paid by financial institutions for the funds ...
  3. Earnings Before Interest & Tax ...

    An indicator of a company's profitability, calculated as revenue ...
  4. Implied Volatility - IV

    The estimated volatility of a security's price.
  5. Plain Vanilla

    The most basic or standard version of a financial instrument, ...
  6. Operating Cost

    Expenses associated with the maintenance and administration of ...
  1. Are dividends considered passive or ordinary income?

    Despite the fact that earning dividends requires no active participation on the part of the shareholder, they do not meet ... Read Full Answer >>
  2. Is dividend income taxable?

    Dividend income is taxable but it is taxed in different ways depending on whether the dividends are qualified or nonqualified. ... Read Full Answer >>
  3. How do dividends affect net asset value (NAV) in mutual funds?

    Distribution of dividends reduces the net asset value (NAV) of mutual fund shares. However, this doesn't mean that fund investors ... Read Full Answer >>
  4. Are mutual funds considered retirement accounts?

    Unlike a 401(k) or Individual Retirement Account (IRA), mutual funds are not classified as retirement accounts. Employers ... Read Full Answer >>
  5. How do dividends affect the balance sheet?

    Dividends paid in cash affect a company's balance sheet by decreasing the company's cash account on the asset side and decreasing ... Read Full Answer >>
  6. Do mutual funds invest only in stocks?

    Mutual funds invest in stocks, but certain types also invest in government and corporate bonds. Stocks are subject to the ... Read Full Answer >>

You May Also Like

Trading Center

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!