CADJPY Potential Reversal Zone – Probable Price Path
U.S. stocks hit a record high again. The yield on US Treasury bills generally rose. The yield on 10-year Treasury bills closed up by more than 2 basis points to 0.65%. The market waited and watched this week’s Fed Chairman Powell’s speech at the annual meeting of global central bank governors on Thursday. The U.S. dollar index fell first and then stabilized, regaining a 0.4% decline, and the market closed slightly better at 93.3
Chinese Vice Premier Liu He spoke with U.S. Trade Representative Lighthizer and Secretary of the Treasury Mnuchin this morning to have a constructive dialogue on the implementation of the first phase of the trade agreement. The Office of the United States Trade Representative issued a statement saying that both China and the United States believe that they have committed themselves to implementing the agreement, and that China has implemented the structural reforms required by the agreement, as well as ensuring greater protection of intellectual property rights and eliminating forced technology transfer. The representatives of the two countries also discussed the substantial increase in China’s purchases of products in the United States and the actions needed to implement the agreement in the future
The Republican National Convention of the United States officially nominated the current President Trump as the presidential candidate and Vice President Pence as the vice presidential candidate. Trump once again criticized the method of mailing votes for being unfair to voters, and accusing the Democratic presidential candidate Biden would make the United States subject to China
CAD: Oil price trends may influence the performance of the Canadian dollar. The U.S. Gulf of Mexico was hit by a tropical storm, causing more than half of its oil production facilities to stop. New York oil futures rose 0.7% yesterday to US$42.6 a barrel. Canadian data reports are mildly-supportive, the economy is on track for a decent bounce in June GDP, although the Q2 data are expected to show a contraction of a little less than 40% (SAAR); data are reported this Friday. Real spreads continue to provide some anchoring for the CAD.
JPY: The market’s risk aversion and the trend of US Treasury bill yields are expected to influence the yen exchange rate. The yield on U.S. Treasury bills rebounded, the Japanese yen was under pressure, and the dollar closed down 0.2% to around 106. The market pays attention to the health of Japanese Prime Minister Shinzo Abe. He went to the hospital twice in the past week, and Abe emphasized that yesterday was to review the detailed results of last week’s examination and did some follow-up examinations. Japanese media reported that Abe has a chance to treat his chronic disease.
From a technical and trading perspective,the CADJPY looks poised to extend to the upside, froma momentum perspective multi time frame Volume Weighted Average Prices on the monthly , weekly and daily time frame are all bullishly orientated. There are distinct fractal similarities between the May/June advance. As such bullish exposure should be rewarded on a break of today’s close as long as it is at or above current levels 80.50, bulls will target an equality objective at 84.76 which also coincides with the March peak before the pandemic crisis decline.
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