Day four: our CAD/JPY trade

There has been reasonable supply coming in to CAD/JPY after Tuesday’s strong day. 


However, there also seems to be some buying though coming back into the pair around 95.30 and this can be seen more prominently on the four-hour chart.

Following on from my trade idea yesterday, staying on the four-hour chart, there is good horizontal support seen around 95.20 area, with this representing the range of highs from June 24 to July 1. Just below here, the 38.2% retracement of the rally from 93.43 (on June 6) to the recent high of 95.58 (at 94.76) looks like good support, hence I would look at potentially moving stops on the idea just under here at 94.65.

At 22:30 AEST we get the US payrolls report, which could give the CAD a bit of a lift if we see a strong print (market currently expects 215,000 jobs to be created). However, given we saw a strong ADP payrolls report in the US last night and saw no real buying of CAD, it makes a lot of sense to feel that the Canadian trade balance figure will be a much bigger driver. Economists expect the deficit to narrow a touch, so an unexpected trade surplus would certainly be welcome for those holding long positions.

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