Source: PaxForex Premium Analytics Portal, Fundamental Insight
The Japanese National CPI for February increased 0.4% monthly and 0.9% annualized. Forex traders can compare this to the Japanese National CPI for January, which came in flat at 0.0% monthly, and rose 0.5% annualized. The Japanese National Core CPI for February increased 0.6% annualized. Forex traders can compare this to the Japanese National Core CPI for January, which rose 0.2% annualized.
The Bank of Japan decided to keep interest rates at -0.10%. Forex traders can compare this to the previous Bank of Japan interest rate decision where interest rates remained unchanged at -0.10%. The Japanese Tertiary Industry Index for January decreased 0.7% monthly. Forex traders can compare this to the Japanese Tertiary Industry Index for December, which rose 0.1% monthly.
Canadian Retail Sales for January are predicted to rise 2.4% monthly, and Canadian Core Retail by 2.4% monthly. Forex traders can compare this to Canadian Retail Sales for December, which decreased 1.8% monthly, and Canadian Core Retail Sales, which dropped 2.5% monthly.
Forex traders should carefully monitor comments from the Bank of Japan and prepare for potential monetary interventions by the central bank. The recent sell-off in the Japanese Yen benefits exporters, as their goods become cheaper in the global market but crush domestic consumer spending power. The Bank of Japan noted price stability as its priority while suggesting that its 2.0% inflation target may take longer to achieve.
The forecast for the CAD/JPY turned bearish after price action exploded higher in an unsustainable move, while the Ichimoku Kinko Hyo Cloud remains flat. Short-term volatility may increase with the Kijun-sen and the Tenkan-sen moving higher, but traders should monitor the CCI. After failing to set a higher high, the CCI began moving lower in extreme overbought territory. A breakdown below 100 could trigger a massive sell-off. Can bear force the CAD/JPY into its horizontal support area? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Should price action for the CAD/JPY remain inside the or breakdown below the 93.750 to 94.750 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 94.300
- Take Profit Zone: 89.950 – 90.850
- Stop Loss Level: 95.350
Should price action for the CAD/JPY breakout above 94.750 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 95.350
- Take Profit Zone: 96.750 – 97.800
- Stop Loss Level: 94.750
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