The uptrend of CAD/JPY still seems to be intact as the pair is testing the bottom of the ascending channel on the 4-hour time frame. This area is also around the 96.00 major psychological support.
Stochastic has just moved out of the oversold region and is moving up, suggesting that Canadian dollar bulls are in control for now. If that’s the case, they could push CAD/JPY back to the top of the channel or at least midway around 100.00.
Canada will be printing its building permits report in today’s U.S. session and is awaiting a speech by new Bank of Canada Governor Poloz tomorrow. Around that time, Canada will also print its Ivey PMI figure and possibly show an improvement from 52.2 to 55.3. On Friday, Canada will release its jobs report. There are no major reports due from Japan for the rest of the week.
Setting a stop below the 95.00 handle with a target of 100.00 would be close to a 3:1 reward-to-risk ratio.
By Kate Curtis from Trader’s Way