The cross between the Canadian Dollar and the Japanese Yen is seen as a strong substitute for the USD/JPY pair when a trader is wary of trading the US Dollar. However, CAD/JPY is historically more sensitive to changes in market-wide sentiment than USD/JPY due to the historically higher yield attached to the Canadian Dollar. Further, the 'Loonie' - as the Canadian Dollar is known - is affected by oil prices because of Canada's energy exports.
USDCAD, CADJPY key levels to watch. USDCAD upside limited as pair heads lower. CADJPY consolidation continues, focus on potential breakout.
by Rich Dvorak