Fundamental Analysis:
• The Non-Weighted Currency Index of the JPY has just broken out of a triangle to the upside, indicating JPY strength at the moment.
• Japan’s 10-year bonds have been in an uptrend for months and have just rejected the 50% Fibonacci level to the upside.
• The BoJ remains one of the most hawkish central banks, and Japan’s economy continues to show strength, marked by rising inflation since November 2024.
• Meanwhile, the Non-Weighted Currency Index of the CAD has been in a downtrend for a long time, signaling CAD weakness against other currencies.
• Canada’s 10-year bonds are currently range-bound, but the structure resembles a bearish flag, suggesting a possible breakdown below support.
• The Canadian economy is stagnating, and while unemployment has decreased compared to the previous month, it remains relatively high.
• Canadian inflation is slightly below the BoC’s target, which suggests that after their recent 25 bps rate cut, they may cut rates further to boost inflation back to 2%, stimulate the labor market, and increase GDP growth.
• Additionally, the downtrend in oil prices does not support CAD appreciation.
Technical Analysis:
• On the Weekly timeframe, we observe an ascending triangle that has just broken to the downside.
• On the Daily timeframe, sellers failed to push the price down significantly, indicating weak momentum on the breakout. This suggests a pullback/retest towards the trendline or Fibonacci levels is likely.
• The 50 SMA on the Daily chart is acting as strong resistance.
• The 200 SMA has also been rejected on the Daily timeframe.
• On the 4H timeframe, price is indeed retracing towards the trendline and/or Fibonacci levels.
• COT Report aligns with my bias.
• 82% of retail traders are positioned on the opposite side (buying).
• The Non-Weighted Currency Index of the JPY has just broken out of a triangle to the upside, indicating JPY strength at the moment.
• Japan’s 10-year bonds have been in an uptrend for months and have just rejected the 50% Fibonacci level to the upside.
• The BoJ remains one of the most hawkish central banks, and Japan’s economy continues to show strength, marked by rising inflation since November 2024.
• Meanwhile, the Non-Weighted Currency Index of the CAD has been in a downtrend for a long time, signaling CAD weakness against other currencies.
• Canada’s 10-year bonds are currently range-bound, but the structure resembles a bearish flag, suggesting a possible breakdown below support.
• The Canadian economy is stagnating, and while unemployment has decreased compared to the previous month, it remains relatively high.
• Canadian inflation is slightly below the BoC’s target, which suggests that after their recent 25 bps rate cut, they may cut rates further to boost inflation back to 2%, stimulate the labor market, and increase GDP growth.
• Additionally, the downtrend in oil prices does not support CAD appreciation.
Technical Analysis:
• On the Weekly timeframe, we observe an ascending triangle that has just broken to the downside.
• On the Daily timeframe, sellers failed to push the price down significantly, indicating weak momentum on the breakout. This suggests a pullback/retest towards the trendline or Fibonacci levels is likely.
• The 50 SMA on the Daily chart is acting as strong resistance.
• The 200 SMA has also been rejected on the Daily timeframe.
• On the 4H timeframe, price is indeed retracing towards the trendline and/or Fibonacci levels.
• COT Report aligns with my bias.
• 82% of retail traders are positioned on the opposite side (buying).
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.