A rate hike from the BoC and a hawkish tone to their subsequent comments has the CAD/JPY on the move higher. The central bank continues to see financial conditions “exceptionally simulative” despite their current tightening policy. Policy makers did point to a slower than expected recovery which could keep them on hold going forward, but as long as credit is flowing in the country they will have the ability to raise rates again. The pair is looking to test the 20-Day SMA at 80.99, where a break above would encourage me to start building into a longer-term position. A move above trend line resistance at 82.00 will be required before I become aggressive. Solid support at 79.00 is potentially limiting downside risks and another re-test of the level could also inspire a bullish trade.
DailyFX provides forex news on the economic reports and political events that influence the currency market.
Learn currency trading with a free practice account and charts from FXCM.
