CADJPY to 86?

CADJPY to 86?

CADJPY to 86?

Between the OPEC deal and the strong U.S. dollar, CAD/JPY has been one of the best performing currencies. In the days ahead we continue to look for oil to rise because major OPEC deals can have a positive impact on oil prices and in turn the Canadian dollar for days to come. At the same time, we have every reason to believe that U.S. labor market numbers will be stronger. Jobless claims have been low, confidence is at a 9 year high according to the Conference Board’s report and ADP reported a significant uptick in private sector payroll. So on a fundamental basis, CAD/JPY could easily hit 86.

Technically, the currency pair is still flirting with 85. While it traded above it, the break of this key level is not very convincing. With that in mind, we still believe that the path of least resistance for the currency pair is higher and view a pullback towards 84 (if we get it) as an attractive entry.

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