Anyone down for a simple trend correction play on a Loonie pair?
CAD/JPY has been forming higher lows for the past few weeks, and it looks like another test of support is in the works.
Check out these neat retracement levels ahead of the June 2023 BOC statement!
CAD/JPY 1-hour Forex Chart by TV
This forex pair is already in correction mode, as price retreated from the highs around 104.60 and is bouncing off the 38.2% Fib in line with today’s pivot point.
If this is enough to get Loonie bulls charging, CAD/JPY could resume the climb to the swing high or even until R1 (104.91) close to the 105.00 handle soon.
A larger pullback could still reach the 50% level that coincides with the 100 SMA dynamic support and 103.50 minor psychological mark.
An even deeper correction could test the 61.8% Fib that’s right at the area of interest, 200 SMA dynamic inflection point, and the 103.00 major psychological support. Talk about confluence!
Technical indicators are hinting that the trend is still our friend, as the 100 SMA is above the 200 SMA while Stochastic is pulling higher already. These suggest that bullish vibes are present and that buyers are eager to hop in again.
I’d keep an eye out for Canada’s Ivey PMI release in today’s New York session, as number crunchers are predicting an improvement from 56.8 to 57.2.
Stronger than expected results could get CAD traders hopeful for a “hawkish hold” from the BOC decision or even an actual rate hike!
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