The CAD/JPY pair broke higher during the session on Wednesday, as the Japanese yen in general was sold off. This market tends to be very sensitive to the price of oil as well, and it of course had a slightly positive session. However, I am not anticipating a lot of help from the oil markets and I believe that the move is probably going to be more or less driven by the Japanese yen more than anything else. That being said, it appears that the Japanese yen is getting ready to get pummeled yet again.
The Yen has lost value against most currencies over the last several sessions, and this of course puts pressure to the upside in this marketplace. The Canadian dollar is a necessarily a currency that I like holding onto, but at this point in time it’s pretty much anything against the Yen that I like. That being said, this market will be a lot like the EUR/JPY pair, it isn’t necessarily that I would be buying the Euro either, it’s just that I really like selling the Yen overall.
$80 looms large in the WTI market
If we can hold support at the $80 level in the WTI Crude Oil market, I believe that this pair will continue to go higher and at a fairly significant pace. Even if we don’t, I think that the Japanese yen itself will make sure that this pair goes higher as it is so weak at the moment.
I see this market heading to the 99 handle, and then ultimately the 100 handle, which is essentially parity. The market may have pullbacks from time to time, but I believe ultimately this will end up being buying opportunity after buying opportunity as the market certainly is shunning the Yen overall, and there is nothing coming out of the Bank of Japan or Japanese economic numbers that suggests anything different. I would not consider this market been able to be sold until we get below the 93 handle, something that does not look very likely.