What a turnaround in CAD/JPY sentiment
The pair seemed like it was doomed in Friday trading in Europe but produced a remarkable turnaround into the close to stave off a daily break below the 21 April and 19 July lows at 85.42, ending last week at 85.57; the low hit 84.67 mind you.
The impressive turnaround is helped by a significant shift in sentiment this week, as risk trades are rallying amid the fact that it is pretty much curtains closed for any major taper announcement at Jackson Hole this week.
The Friday candlestick is a classic bullish pin bar and that has been validated by the price action today as suddenly the head-and-shoulders breakdown is turning into more of a triple-bottom what have you will for CAD/JPY day traders.
The pair has also just taken out its 100-hour moving average at 86.20, seeing the near-term bias turn more neutral instead. That at least underscores that buyers are very much in the game to try and further turn things around in the pair.
The 200-hour moving average will be the next key challenge closer to 87.00.
The fact that oil is up 3% on the day to $64 only helps to bolster loonie sentiment today.
I was too early in ruling out any chance for buyers to make a stand
at the end of last week. But we’re here today and there’s a lot of potential in the chart again as the technicals begin to match up with the fundamental argument that I mentioned on Friday.