CADJPY : Key Levels & Catalysts – Potential Uptrend & Canadian CPI Release
CADJPY has established 104.890 as a robust support level and 108.019 as a key resistance level in the 4-hour timeframe. Notably, the recent monetary policy statement from the BOJ, which kept interest rates unchanged and continued their dovish guidance, earlier today, prompted an upward movement in price from 106.520 to 107.071.
Today, (December 19), there is anticipation surrounding the release of the Consumer Price Index (CPI) news from Canada. The forecast for this event is -0.1%, marking a decrease from the previous figure of 0.1%. A favourable scenario for the Canadian Dollar would be if the actual CPI number, released at 13:30 GMT, surpasses the forecast.
Examining the current price action, an upward movement is evident, aligning with the established key levels of 104.890 as support and 108.019 as resistance. In the context of this uptrend, if the price approaches the resistance level and successfully breaches it, there is a heightened probability of the price sustaining its upward trajectory. Conversely, if the resistance at 108.019 holds and rejects the price, there is a considerable likelihood of a reversal back to the support level at 104.890.
As we await the release of the CPI news from Canada, the analysis suggests that the recent upward momentum in CADJPY could be influenced by both the monetary policy statement and the anticipation of the CPI data. The price action, particularly within the crucial support and resistance levels, reflects the potential for a continuation of the uptrend if the resistance is breached. However, a rejection at the resistance level could signify a reversal, emphasizing the significance of monitoring the unfolding market dynamics.
Traders should exercise caution and remain vigilant as they await the CPI news release, as it has the potential to significantly impact the direction of CADJPY. The outcome of the CPI data in relation to the forecast will likely play a pivotal role in determining the short to mid-term trajectory of the Canadian Dollar against the Japanese Yen.
