CAD/JPY bulls keep eyes on the Bank of Japan (BOJ) monetary policy decision while flirting with the seven-year high around 94.00 during Friday’s Asian session. In doing so, the cross-currency pair pauses after consecutive seven days of an uptrend.

In addition to the pre-BOJ anxiety, mixed concerns over the Ukraine-Russia peace talks and China’s step back from the previous readiness to an easy regulatory crackdown on the property and IT companies also challenge CAD/JPY.

Furthermore, easing in prices of Canada’s main export, WTI crude oil also negatively affects the pair’s moves. The black gold rose the most in two weeks the previous day before recently easing to $103.30. Sour sentiment and IEA comments may have tested the commodity bulls of late.

Elsewhere, the Bank of Japan (BOJ) has already signaled its readiness to keep the easy money flow continue and part ways from the global central banks, which in turn allows traders to prepare for a positive surprise and hence propel the pair before the event.

On the technical side, Cadjpy can be seen trading near Aug 2015 highs with too much fundamentals supporting the hawkish momentum. But after breaking multiple major resistance zones and invalidating price actions from the market portofolio, the pair has entered into a strong overbought conditions on the interday as well as intraday time frames. Canadian Dollar versus Japanese yen will find strong resistance from bears below the July 2015 highs near 96.225. Drawing the fibo retracement on the weekly and monthly time frame, the pair has just retraced above the 61.8% fibo level. This area can become a strong fractal from taking dovish entries over the pair. Our stop loss at 95.90 if violated, traders can check for re entries near 96.20 with take profit at 88.74. 

CADJPY Facing Strong Resistance & Overbought Conditions

Mar 19 2022