- The Canadian dollar has rallied rather nicely during the trading session on Wednesday against the Japanese yen to break above the crucial 50 Day EMA and test a major round figure in the form of the ¥160 level.
- The 160 and level has been important multiple times, so it’ll definitely be worth watching very closely, as we are trying to sort out whether or not we have enough momentum to continue going higher.
Canada and Tariffs
Top Forex Brokers
The one thing that you need to keep in the back of your mind when trading the Canadian dollar, as things stand right now the Loonie is going to be highly driven by the idea of tariffs coming out the United States. Recently, Donald Trump has suggested that tariffs might be a little bit more targeted instead of broad sweeping, and that might help Canada recover some of its losses when it comes to the currency market. That being said, this might have more to do with the yen, so we need to pay attention to other JPY-related currency pairs.
Ultimately, the other Japanese yen related pairs did see other currencies gaining, so I think at this point time we are starting to look at the reality that Japan can only tighten monetary policy so much, and I think that will be the big thing here. With this, I think you need to be cautious but recognize that we have a situation where traders are moving in the same direction across multiple Forex markets, and that is the big thing to take away from here.
The ¥106 level is an area that I think will continue to attract a certain amount of attention, but I also recognize that it has a certain amount of “market memory” attached to it as well. With this, I suspect it is probably only a matter of time before we see some resistance. However, if we can break above there and close above there on a daily chart, this pair could run all the way to the 200 Day EMA
Ready to trade our CAD Forex forecast? Here’s some of the top trading account in Canada to check out