CADJPY Bullish
Fundamental Analysis
Bullish CAD Factors:
Oil Prices:
Bearish JPY Factors:
BOJ Monetary Policy:
Risk-On Sentiment:
Historically, CADJPY trends bullish in mid to late December due to:
Increased demand for risk assets.
Seasonal oil demand, which strengthens CAD.
Year-end positioning and reduced JPY demand in global markets.
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Technical Analysis
Bullish CAD Factors:
Oil Prices:
- Canada’s economy is heavily reliant on oil exports. Rising oil prices typically strengthen the CAD.
- If crude oil prices rebound, CADJPY could move higher.
Economic Outlook: - Recent data might indicate improving Canadian GDP growth or employment figures, supporting CAD strength.
- The Bank of Canada’s monetary policy stance (e.g., potential rate hikes or a neutral tone) can boost CAD sentiment.
Bearish JPY Factors:
BOJ Monetary Policy:
- The Bank of Japan continues its ultra-loose monetary policy, suppressing JPY strength.
- Low interest rates and yield curve control weaken the JPY compared to higher-yield currencies like CAD.
Risk-On Sentiment:
- During December, markets often exhibit a "Santa rally" (bullish equities). Risk-on sentiment favors CAD over the safe-haven JPY.
- Seasonality:
Historically, CADJPY trends bullish in mid to late December due to:
Increased demand for risk assets.
Seasonal oil demand, which strengthens CAD.
Year-end positioning and reduced JPY demand in global markets.
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Technical Analysis
- The CADJPY chart indicates bullish divergence on the RSI.
- Price is making lower lows while RSI is making higher lows, suggesting a potential reversal.
- The pair is testing a strong support zone around 105.00–106.00.
- Historical price action shows that this level has acted as a significant support in the past.
- A falling wedge pattern is forming:
- This is a bullish reversal pattern, indicating that a breakout to the upside is probable.
- Bullish divergence near the oversold region signals buying pressure is increasing.
- Increasing volume near the support zone may confirm a breakout to the upside.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.