CAD/JPY Daily Outlook - Mar. 28. 2013

Christopher Lewis

The CAD/JPY pair is one that I love playing when the direction of the oil markets seems relatively clear. During the Wednesday session, we saw strength in both the major oil markets that I follow. The shape of the candle formed a nice looking hammer, and as you can see I have the 50 day moving average drawn on the chart. The 50 day moving averages held quite nicely in this pair historically, and the fact that we saw the market by the Canadian dollar later in the day does suggest to me that perhaps we are about to get a bit of a bounce.

This was not only in this market, but I saw a lot of Yen selling in general. The New Zealand dollar, Australian dollar, and US dollar all did the exact same thing against the Yen late in the day. Because of this, I believe that a break of the highs should set this market higher, and aiming for the 95 handle. So far, 95 have been a bit of a stretch in this marketplace, but I think it's only a matter of time as not only are oil markets looking healthy, but the Bank of Japan is willing to sell off the Yen.

Canada Exports, Japan Imports

One of the great things about this pair is that it's a simple one. The Canadians export oil, and a lot of it. However, on the other side of the Pacific you have Japan which has to import all of its fuel. With that being the case this becomes a fairly significant oil play. As long as oil remains somewhat buoyant, this market should continue higher.

I believe that all the way down to the 90 handle we should see significant support. Because of this, I am more than willing to buy pullbacks as well. The Yen in general has been rather stubborn lately, but as you will have noticed, none of the yen related pairs have pullback significantly. That is because the market is so bearish of the Yen right now, that it simply can't do anything but selloff has other currencies rise against it.

CAD/JPY Dailyt Outlook - March 28, 2013

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.

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