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CADJPY – Back to the Lows?
It’s been a rollercoaster trip for CADJPY over the past 24 hours. The agreement to curb production by OPEC boosted oil by 7% and more hawkish rhetoric by Kansas Fed Chief Esther George added fuel to the fire sending the pair towards the 78.00 figure. But just as quickly as it rose, the pair gave back all of it gains and then some when equities tumbled in afternoon NY trade today.
The key question going forward is whether this spike in risk aversion is just a one-day affair or the start of a more serious selloff as investor begin to worry about the financial risk posed by the possible liquidation of Deutsche Bank. Tomorrow the market will also get a glimpse at the Canadian GDP data, and while these are only monthly results any miss of expectation could add to the woes and push the pair towards a retest of the bottom at 75.00. For now, the technicals have carved out a very ugly shooting star on the dailies and until those highs are broken, every rally is a sell.