News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Mixed
Oil - US Crude
Bullish
Wall Street
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bearish
GBP/USD
Mixed
USD/JPY
Bullish
More View more
Real Time News
  • Greed is a natural human emotion that affects individuals to varying degrees. Unfortunately, when viewed in the context of trading, greed has proven to be a hindrance more often than it has assisted traders. Learn how to control greed in trading here: https://t.co/kODPAfJE79 https://t.co/rOnWgIotlz
  • Commodities Update: As of 02:00, these are your best and worst performers based on the London trading schedule: Gold: 0.11% Oil - US Crude: 0.02% Silver: -0.12% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/ENxA7SeIDF
  • Forex Update: As of 02:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: -0.01% 🇨🇦CAD: -0.13% 🇪🇺EUR: -0.13% 🇨🇭CHF: -0.15% 🇬🇧GBP: -0.18% 🇦🇺AUD: -0.26% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/cmUacZR1bK
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Gold are long at 87.12%, while traders in France 40 are at opposite extremes with 74.18%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/WKmgAjSLWR
  • Use this technical analysis pattern recognition skills test to sharpen your knowledge: https://t.co/Qgz89PTxnu https://t.co/3rXsyuSemd
  • Nasdaq 100 Rebounds as Tapering Fears Ease, Hang Seng and ASX 200 Climb https://www.dailyfx.com/forex/market_alert/2021/06/22/Nasdaq-100-Rebounds-as-Tapering-Fears-Ease-Hang-Seng-and-ASX-200-Climb.html https://t.co/NZxRtj3rNa
  • ANZ Bank sees New Zealand house prices increasing by 0.7% in 2022 - BBG
  • Ever wonder if there are other chart types that can be sued for technical analysis? HLOC charts are discussed in the following article as well as their pros and cons. Learn more here: https://t.co/qV3c7a4YR3 https://t.co/9ZUHvkEw7R
  • Greed is a natural human emotion that affects individuals to varying degrees. Unfortunately, when viewed in the context of trading, greed has proven to be a hindrance more often than it has assisted traders. Learn how to control greed in trading here: https://t.co/kODPAfJE79 https://t.co/aGz502atu0
  • Forex quotes reflect the price of different currencies at any point in time. Since a trader’s profit or loss is determined by movements in price, it is essential to develop a sound understanding of how to read currency pairs. Learn how to read quotes here: https://t.co/CNtqrKWDBY https://t.co/OibiizbywE
Tactically Bearish CAD/JPY on Dovish BoC, Unstable Risk Environment

Tactically Bearish CAD/JPY on Dovish BoC, Unstable Risk Environment

Tyler Yell, CMT, Currency Strategist

Point to Establish Short Exposure: Retracement to 83.10/50 zone

Spot: 81.75

Initial Target/Point to bring a stop to break even:79.50 (1W Forward 2 Std. Dev. Bearish Target based on 1W Implied Vol)

Swing Target (If not holding trade :)78.42 JPY per CAD (78.6% Fib of 2016-2018 Range)

Invalidation Level: 85.30 (38.2% retracement of 2018 Range)

If you are looking to create your own trading ideas, you may enjoy our FREE Trading Guides

The Canadian dollar has been on the defensive lately especially after Bank of Canada chief Stephen Poloz appeared to have taken an April rate hike off the table. A key market that traders will look at to see how a rate hike is priced in is the Overnight Index Swap market, which shows different rate levels at different tenors based economic developments and central bank guidance.

A look at the falling probability of the hike can help you see how why the Canadian Dollar rate has recently weakened as the probability for a hike has fallen from ~70% to ~25% this week.

Falling Probability of a Bank of Canada Rate Hike Weakens CAD

Please add a description for the image.

Data source: Bloomberg

On the other side of the spectrum is the stubbornly strong Japanese Yen. The Yen has risen as Treasury yields continue to fall on disappointing economic data. Most recently US Retail Sales disappointed and the reappointment of the White House Sr. Economic Advisor with a Trump loyalist, Larry Kudlow seems to heighten the potential of an aggressive trade stance that results in retaliation from key global trade players like Europe and China.

Japanese Yen Rate Forecast Available Here

Should such a retaliation take place, the Japanese Yen could see the further strengthening and the weak Canadian Dollar may be the path of least resistance for Yen gains.

A technical dashboard that I share on FX Closing Bell, Monday’s through Thursday shows CAD as rather weak per the RSI(3) to see short-term momentum. On the graph below, look to CADJPY for sentiment readings and standard deviations bullish and bearish targets. Given the analyst pick’s focus, we’ll be looking to the bearish, 1W 1SD Down and 1W 2SD Down targets to be hit in the coming weeks at 80.62 and 79.46 respectively.

Technical Dashboard Shows Persistently Weak CAD

Please add a description for the image.

Data Source: Bloomberg

Here’s A Recent Breakdown Of The Canadian Dollar Rate Forecast

Technical Outlook Favors Bearish Conviction

Please add a description for the image.

Chart Source: IG Charting Package, IG UK Price Feed. Created by Tyler Yell, CMT

The key pivot on the chart is the 61.8% at 81.25. A breakdown below this level would indicate a further wash out of CAD longs and a move into JPY longs.

The next zone to the downside is 79.42/80, which is the 78.6% retracement of the 2016-2018 and the 261.8% Fibonacci extension of the double-top from the September-January double top with a neckline in November.

The invalidation on the bearish breakdown continuing is the 38.2% retracement of the 2018 range at 85.22.

Access our popular free trading guides to enhance your trading strategy here.

New to FX trading? No worries, we created this guide just for you.

---Written by Tyler Yell, CMT

Tyler Yell is a Chartered Market Technician. Tyler provides Technical analysis that is powered by fundamental factors on key markets as well as t1rading educational resources. Read more of Tyler’s Technical reports via his bio page.

Communicate with Tyler and have your shout below by posting in the comments area. Feel free to include your market views as well.

Discuss this market with Tyler in the live webinar, FX Closing Bell, Weekdays Monday-Thursday at 3 pm ET.

Talk markets on twitter @ForexYell

Join Tyler’s distribution list.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES