CAD/JPY contests key daily support at 85.42
With oil pressured down by 2% to $70.50 and 10-year Treasury yields marked down by 4 bps to 1.33%, the pressure is on as sellers look to make the most of the situation and go in search of the next leg lower.
From a purely rate differential and policy divergence argument, this is one pair that should be heading in the other direction but that isn’t the focus of the market right now.
And the technicals clearly sends that message as price is contesting key daily support at 85.42 now with a break to exacerbate a drop towards the August low at 84.67 next.
As also mentioned earlier, the scary part for the bulls is that there is a series of lower highs, lower lows being established since 2H 2021 and until that pattern breaks, any major return to the upside is going to be tough to come for the pair.
