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.

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
Bearish
Oil - US Crude
Bearish
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
Wall Street
Bearish
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
Bearish
More View more
Real Time News
  • (Weekly Fundamental) Australian Dollar Outlook: Tied to Biden Stimulus Bets, S&P 500, US Dollar, Treasuries $AUDUSD #SP500 #stimulusbill #USD https://www.dailyfx.com/forex/fundamental/forecast/weekly/aud/2021/01/16/Australian-Dollar-Outlook-Tied-to-Biden-Stimulus-Bets-SP-500-US-Dollar-Treasuries.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/H7aus0Aljt
  • The inside bar pattern occurs regularly within financial markets. Incorporating the inside bar strategy can enhance a trader's market analysis. Find out how more here: https://t.co/E3EWOYTYNw https://t.co/7zI3p6UNVs
  • Bank of Japan to mull widening of its long-term yield band -BBG $USDJPY
  • While the rise in longer-dated Treasury yields have been impressive as of late, March highs remain a key focus for resistance The medium-term uptrend remains intact, maintained by rising support from August Fading fiscal stimulus expectations (size) may sour yields ahead https://t.co/L3vBcF0ts7
  • Trading bias allows traders to make informative decisions when dealing in the market. This relates to both novice and experienced traders alike. Start learning how you may be able to make more informed decisions here: https://t.co/rz7fqhRoMG https://t.co/vFJ8zmphMm
  • While the US Dollar has been holding its ground, its downside bias against the Singapore Dollar, New Taiwan Dollar Thai Baht and Indonesian Rupiah remains intact as it hovers at support. Get your market update from @ddubrovskyFX here: https://t.co/p7gAztWuVG https://t.co/zB1pOS6U4D
  • The $VIX is now running 227 trading days above the 20 handle. It is also working its way quickly into a dead-end descending triangle. These don't really break lower... https://t.co/39Pr7YrQ08
  • WTI Crude amongst the many market participants taking a hit today, down almost 3% $WTI $USD https://t.co/eg2phm1wUO
  • The power of suggestion: even though the market recognized the mistake with mixing Tesla founder Musk's suggestion to use the Signal app with the stock SIGL, it is still trading >2,000% above pre-remark levels and maintains heavy volume. Us speculators are an interesting people
  • Forex Update: As of 21:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: -0.07% 🇨🇭CHF: -0.35% 🇪🇺EUR: -0.65% 🇨🇦CAD: -0.75% 🇦🇺AUD: -0.95% 🇳🇿NZD: -1.19% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/6NZVebT00L
CAD/JPY 1Q Forecast: Long CAD/JPY - Time to Start Mending the Global Economy

CAD/JPY 1Q Forecast: Long CAD/JPY - Time to Start Mending the Global Economy

2021-01-03 00:00:00
Nick Cawley, Strategist

CAD/JPY 1Q Forecast: Long CAD/JPY – Time to Start Mending the Global Economy

Advertisement

2020 will be known as the year an unknown virus bought the global economy to its knees in a matter of a few weeks, destroying growth, decimating upbeat markets, and drawing comparisons with the Great Depression of the 1930s. The ensuing lockdowns to prevent a further spread of the Covid-19 virus saw economies around the world go into lockdown as economic growth slumped and unemployment soared ever higher. Looking ahead into 2021, as multiple Covid-19 vaccines come to the market, this may well be the year that global economies recover, at least partially, from one of the worst setbacks in decades.

One notable mover over the first quarter of 2020 was the price of oil which slumped as the economy went into lockdown. Indeed, at one point in late-April, the price of US crude turned negative for the first time in history as traders shunned the oil contract on fear of having to take physical delivery of barrels of oil. This hammered petrocurrencies – currencies that are heavily impacted by moves in the price of oil – including the Canadian dollar.

On the other side of the coin, various currencies performed strongly throughout 2020 due to their perceived haven status, a place to store money in times of trouble. These currencies include the Japanese Yen, Swiss Franc, and the US dollar.

So looking ahead to next year, I’ll look at a long CAD/JPY trade, a trade that hopefully benefits from the nascent economic recovery. I’m looking for both sides of the FX-pair to perform with the Canadian dollar appreciating alongside an uplift in the price of oil, while the Japanese Yen may depreciate as risk appetite picks up again.

The daily CAD/JPY chart shows the pair range trading over the last six months with recent price action favoring the upside. The pair are now above all three moving averages which, importantly, have now all moved into a sequence (20-/50-/200-dsma) suggesting a positive sentiment in the market. A series of medium-term higher lows are clearly identifiable on the chart and a break and close above the three lower highs at 81.427, then 81.585, and finally 81.911 would give an additional boost to the upside and leave 84.746 as the next target. The downside is protected by the three moving averages.

CAD/JPY Daily Price Chart (January – December 2020)

CAD/JPY Daily Price Chart January December 2020

Chart prepared by Nicholas Cawley, created with ProRealTime

Top Trading Opportunities in 2021
Top Trading Opportunities in 2021
Recommended by Nick Cawley
Get Your Free Top Trading Opportunities Forecast
Get My Guide

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

DISCLOSURES