CADJPY Analysis and Forecast

Despite hitting a new high, CADJPY remains within a range, indicating a potential lack of strong momentum in either direction. The currency pair reached a high of 112.46 last week, the highest level since 2008. However, it has since remained stagnant in the 112.00 area.

The market’s ability to stay above the 20-day simple moving average (SMA) is viewed as a positive sign for a potential bullish breakout above 112.00. Additionally, the RSI and stochastic oscillator are both showing signs of a positive session ahead, with the RSI above the 50 neutral mark and the stochastic oscillator poised for an upside reversal.

If the bulls manage to break through the 112.00 resistance level, the long-term uptrend could continue towards the resistance area of 113.50-114.20. Further upside targets include the 2007 barrier of 116.50 and the 161.8% Fibonacci extension at 116.83. However, the 118.20 constraining zone may present a challenge for further extensions.

Selling pressure may remain under control as long as the price stays above the shorter-term SMAs and the support trendline at 110.45. However, if the price falls below these levels, bears could target the 200-day SMA at 108.88. A break below this level could worsen the short-term outlook and open the door towards the 108.00 restrictive territory.

The highlight of the Canadian calendar is the upcoming Bank of Canada (BoC) rate decision at 13:45 GMT. Traders will be closely watching the central bank’s decision and accompanying statement for any clues about future monetary policy. This event could potentially impact the CADJPY pair and lead to increased volatility in the currency markets.

While CADJPY remains within a range, there are upside risks if the bulls manage to break through the 112.00 resistance level. Technical indicators suggest a positive outlook, but traders should be cautious of potential downside risks, especially in the event of a break below key support levels. The BoC rate decision is a key event to watch for potential market-moving developments in the CADJPY pair.