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  • US Dollar strength has continued today, with the $DXY hitting an intraday high around 91.20. The index is now trading slightly lower, currently around 91.05, as markets wait for Powell's speech at 12:05 EST. $USD https://t.co/rxdvVhXGVX
  • $USDCAD is weaker in the aftermath of OPEC+'s decision to hold output steady, falling to trade back around the 1.2600 level. The pair fell to its lowest level in nearly three years during last week's volatility, rebounded to a high of 1.2730, and has then edged lower. $USD $CAD https://t.co/QBVe8X5nVO
  • Russia reportedly has been given an exemption from OPEC+ supply deal - Delegates
  • The Canadian Dollar is surging alongside the rise in oil prices following OPEC+'s decision to hold output steady. $CADJPY has risen above 85.00 to trade at its highest levels since late 2018. $CAD $JPY https://t.co/YzikqjWyvT
  • $WTI Crude Oil is extending its gains, rising above 64.00 to trade at its highest levels in over a year. $OIL $USO https://t.co/7aFsMmJd7x
  • OPEC+ decides not to hike output by 500kbpd in April - Delegate Oil prices at highs of the day https://t.co/UBAtzuEs0b
  • Forex Update: As of 15:00, these are your best and worst performers based on the London trading schedule: 🇬🇧GBP: 0.29% 🇨🇦CAD: 0.29% 🇦🇺AUD: 0.21% 🇪🇺EUR: -0.26% 🇯🇵JPY: -0.53% 🇨🇭CHF: -0.56% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/dULwFuQVcF
  • OPEC+ is close to keeping output unchanged in April - Delegates #OOTT
  • Indices Update: As of 15:00, these are your best and worst performers based on the London trading schedule: Wall Street: 0.09% US 500: 0.04% France 40: 0.04% FTSE 100: -0.13% Germany 30: -0.16% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/raVqHjfXWM
  • RT @Amena__Bakr: Saudi Arabia is proposing a rollover for April and May- delegates #OOTT #opec
Top Trade Idea 2019: Bearish CAD/JPY – JPY Strength May Align With Global Risks After CA Data Turndown

Top Trade Idea 2019: Bearish CAD/JPY – JPY Strength May Align With Global Risks After CA Data Turndown

Tyler Yell, CMT, Currency Strategist

Top Trade: Bullish JPY against CAD

  • Spot: 85 JPY per CAD
  • Initiation: Sell on Weekly Close < 80

Objectives:

  • Target 1: 72.15 JPY per CAD (2011 low)
  • Target 2: 68 JPY per CAD (2009 low)
  • Invalidation: Weekly close above 83

Not all is well in the Great White North. Canada was particularly hard hit by the crude oil bear market of 2018. While many global investors look to the unified benchmark of Brent or the US benchmark in WTI, the price decline in Canada’s Western Select Crude from Alberta took a storybook tumble in 2018. The price of Canadian crude fell by ~76%, and alongside the fall in Canadian crude went Canada’s terms of trade, which is reading of the comparative value of exports to imports. In December, the Bank of Canada noted that the drop in crude was greater than expected and would and that rates may now be appropriate, which caused Goldman Sachs to drop their rate hike expectation in January.

Top Trade Idea 2019: Bearish CAD/JPY – JPY Strength May Align With Global Risks After CA Data Turndown

Data source: Bloomberg, Citi

While the above portends Canadian Dollar weakness, The Land of the Rising Sun’s story could bring unwelcome strength to the JPY. Two thousand nineteen is the anticipated year of monetary policy tightening by the Bank of Japan. Not necessarily because things are great, but because Japan is running out of assets to buy to stimulate the economy. In November, numbers came to surface showing that the Bank of Japan’s Total Asset Holdings had surpassed the size of Japan’s GDP when their assets reached 553.6 trillion yen ($4.9 trillion) against a nominal seasonally adjusted GDP of 552.8 trillion yen.

The Opportunity: Bearish CADJPY on Break < 80

Top Trade Idea 2019: Bearish CAD/JPY – JPY Strength May Align With Global Risks After CA Data Turndown

The Chart: Lower Highs & Momentum Divergence Favors CAD/JPY Downside Continuation

Top Trade Idea 2019: Bearish CAD/JPY – JPY Strength May Align With Global Risks After CA Data Turndown

Chart Source: Pro Real Time with IG UK Price Feed. Created by Tyler Yell, CMT

Honorable mention: Bearish EUR/JPY as Europe’s problems may prolong with Italian budget, French debt, and Brexit.

To see all the of the analysts Top Trade Ideas for 2019 and Top Lessons from 2018, download the guides on the DailyFX Trading Guides Page.

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

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