Who’s up for trading yen pairs today?
If you are, then you better not miss what’s cookin’ on CAD/JPY’s short-term charts!
Before moving on, ICYMI, yesterday’s watchlist looked at AUD/USD’s Fib resistance zone ahead of the RBA’s meeting minutes release. Be sure to check out if it’s still a good play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
New Zealand removes the last of its COVID restrictions including mandatory masks and isolation for those who tested positive.
Japan’s GDP grew by 1.5% q/q in Q2 (vs. 0.8% expected, 0.7% previous); annual GDP was up by 6.0% (vs. 3.6% previous) as auto exports and tourist arrivals helped offset slowing consumer recovery
China suspends the publishing of the unemployment rate among 16-to-24-year-olds after China’s youth unemployment rate hit consecutive record highs. From April to June, the youth jobless rate reached 20.4%, 20.8%, and 21.3% respectively.
PBoC unexpectedly cut the rate on 401B CNY ($55.25B) worth of one-year MLF loans by 15bps to 2.50%, its second cut in three months.
RBA August meeting minutes: There’s a “credible path back to the inflation target with the cash rate staying at its present level”
Australia’s wage price index grew by 3.6% y/y in Q2 (vs. 3.7% expected, 3.4% previous) supporting another RBA rate hike pause in September
China’s industrial production slowed from 4.4% y/y to 3.7% y/y in July
China’s retail sales eased from 3.1% y/y to 2.5% y/y in July, the slowest since December 2022
China’s fixed asset investment was up by 3.4% in the first seven months of 2023 from the same period a year earlier (vs. 3.8% expected and previous)
China’s unemployment rate ticked higher from 4.0% to 4.2% in July (vs. 4.0% expected)
Japan’s industrial output revised higher from 2.0% to 2.4% m/m in June (vs. -2.2% in May)
U.K.’s unemployment rate rose from 4.0% to 4.2% in the three months to June, the highest since October 2021.
U.K.’s average weekly earnings including bonuses up by 8.2% y/y in the three months to June, marking the fastest increase since July 2021
U.K.’s jobless claimant count change up by 29K in July (vs. 19.6K expected, 16.2K previous)
Switzerland’s producer price index slips by 0.1% m/m in July (vs. 0.2% expected, 0.0% previous)
Price Action News
Overlay of AUD Pairs 15-min
Another day, another chance to spook risk-takers?
China-related currencies like AUD, NZD, and even CAD fell from their Asian session highs after the world’s second-largest economy printed weaker than expected economic reports.
The People’s Bank of China (PBoC) also unexpectedly cut its rates on a one-year lending facility, which contributed to overall risk aversion during the Asian session.
AUD, which shrugged off a less hawkish RBA meeting minutes and found support from a bit of risk-taking earlier in the session, fell to new intraday lows against most of its major counterparts.
German ZEW economic sentiment at 9:00 am GMT
Eurozone ZEW economic sentiment at 9:00 am GMT
Canada’s CPI reports at 12:30 pm GMT
Canada’s manufacturing sales at 12:30 pm GMT
U.S. retail sales numbers at 12:30 pm GMT
U.K. CB leading index at 1:30 pm GMT
U.S. NAHB housing market index at 2:00 pm GMT
AU MI leading index at 12:30 am GMT (Aug. 16)
RBNZ’s policy statement at 2:00 am GMT (Aug. 16)
RBNZ presser at 3:00 am GMT (Aug. 16)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
CAD/JPY 15-min Forex Chart by TV
If you’re into news trading, then you might want to take another look at CAD/JPY!
The pair is trading just under the 108.00 psychological handle, which is not too far from the 100 and 200 SMAs as well as the Pivot Point level in the 15-minute time frame.
More importantly, CAD/JPY is trading just above the ascending channel support in the 15-minute time frame.
Can the pair extend its uptrend today?
Canada is printing its CPI reports today and, based on the other major economies’ inflation data, Canada could see a further slowdown in consumer price increases in July.
On the other hand, U.S. session traders seem to find it relatively easy to shrug off China-related concerns in favor of pricing the end of the Fed’s rate hike cycle.
If we see risk-taking in the next trading sessions, and if Japanese authorities are unsuccessful in defending against the yen’s persistent weakness, then CAD/JPY could revisit higher inflection points like 108.35 or 108.50.
But if risk aversion becomes the name of the game today, or if we see a yuuuge intervention effort to strengthen the yen, then CAD/JPY could retest lower support levels if not see a short-term downside breakout.
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