With Canada’s CPI on the rise, should we keep a close eye on the direction of the CAD/JPY pair, which is showing strong support?

With Canada’s CPI on the rise, should we keep a close eye on the direction of the CAD/JPY pair, which appears to have solid support?

17.04.2024

In yesterday’s U.S. trading session, the Canadian dollar fell slightly against the yen despite the release of Canada’s March CPI, which rose 0.1 percentage points year-over-year to 2.9% from the previous month’s 2.8%. The CAD/JPY pair dropped momentarily from 112.255 to 111.285.It broke below the 200-period simple moving average (SMA) on the hourly chart. On the 4-hour chart, the decline halted upon touching the 200-period exponential moving average (EMA), and on the daily chart, it is barely holding above the 20-period moving average (MA). Therefore, we will be watching for a potential rebound in the Canadian dollar during U.S. trading hours.

The euro rose against the yen as the German ZEW Economic Sentiment Index for April, released yesterday, improved significantly from 31.7 the previous month to 42.9, and the European ZEW Economic Sentiment Index also showed a similar recovery.The EUR/JPY pair rose from 163.667 to 164.675. It broke out from below the 20-period moving average (MA) on the hourly chart to trade above it. While the 4-hour chart continues to show a downward trend in highs, the 75-period MA is acting as a support line on the daily chart, so we will be watching price movements during European trading hours.

Today’s schedule includes the New Zealand Consumer Price Index at 7:45, Japan’s Trade Balance at 8:50, Australia’s Westpac Leading Index at 9:30, the UK Consumer Price Index, UK Retail Sales, and UK Producer Price Index at 15:00, the Eurozone Consumer Price Index at 18:00, and South Africa’s Retail Sales at 20:00,US MBA Mortgage Applications, at 9:05 PM UK MPC Green’s remarks, at 9:30 PM Canada’s International Securities Turnover, at 11:30 PM US Weekly Crude Oil Inventories, at 1:00 AM UK BOE Governor Bailey’s remarks, at 2:00 AM US 20-Year Treasury Auction, and at 3:00 AM Eurozone ECB President Lagarde’s remarks.With the Canadian CPI on the rise, the Canadian dollar/yen pair is finding support at lower levels, so we need to carefully assess its direction.