Should we keep an eye on the CAD/JPY pair, which hit a new high this year following a surprise rate hike?
08.06.2023
- Remarks by Vice President Buehrle of the Bank of Canada
- Europe: Real GDP
In yesterday’s U.S. currency trading, the Canadian dollar rose against the yen following the Bank of Canada’s (BOC) policy rate announcement, which defied market expectations of a rate hold and instead raised rates by 0.25%. The CAD/JPY pair rose from 103.706 to a new high for the year, reaching 104.877. The price extended its gains to touch the +3σ line of the 4-hour Bollinger Bands.From a technical perspective, the CAD/JPY pair continues its daily uptrend that began on March 24 of this year, with the daily RSI hovering around 70. We will need to assess the direction to determine whether the Canadian dollar’s upward momentum will continue.
European currencies rose against the yen after Germany’s April industrial production data was released yesterday, showing a year-on-year increase of 1.6%—up from the preliminary estimate of 1.4%.The EUR/JPY pair rose from 148.637 to 150.016. It rebounded as the 200-period simple moving average (SMA) on the 4-hour chart provided support. On the daily chart, the 20-period moving average (MA) is acting as a support level, and since the centerline of the Bollinger Bands remains upward-sloping, we will keep a close eye on whether an upward move is likely during European trading hours.
Today, at 6:00 PM, we have Eurozone real GDP and South Africa’s current account balance; at 8:00 PM, South Africa’s manufacturing output; at 9:00 PM, Mexico’s consumer price index; at 9:05 PM, remarks by SNB Governor Jordan of Switzerland; at 9:30 PM, U.S. initial jobless claims; at 11:00 PM, U.S. wholesale inventories;at 11:30 PM, US weekly natural gas inventories; and at 4:10 AM, remarks by BOC Deputy Governor Beaudry. We will be watching for upside potential in the CAD/JPY pair, which has risen following the surprise rate hike.
Author: Keisuke Sakurai
