- The Canadian dollar has rallied on Wednesday, only to continue to see a bit of selling pressure near the 114.60 yen level.
- The Canadian dollar has rallied quite nicely during the trading session against the Japanese yen, only to find selling pressure again at 114.60 yen.
- This is an area that has been difficult to overcome for the last week or two, but ultimately, I do think we are going to make a serious play at the 115 yen level.
Short-term pullbacks should be buying opportunities, with the 113.50 yen level being a bit of a floor. After that, you have the 112 yen level, which is also attracting the 50-day EMA.
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Breaking above the 115 yen level would, of course, be very positive, and a lot of people would look at that through the prism of a sign that we are going much higher, and therefore that is what I am waiting for as well.
I still like the idea of buying dips because I do not like the yen. It isn't so much about Canadian dollar strength, although it is worth noting that the Canadian dollar has held its own against the US dollar as of late. The reality is, this is all about Japan.
If oil starts to pick up, that will send the Canadian dollar much higher against the Japanese yen because, unlike against the US dollar, Japan is not a producer of crude oil. That makes this more of a pure play on the petroleum markets. When you look at longer-term charts, it is very possible we could be going as high as 119 yen, but I don't think that is something that happens very quickly or easily. I think that is just a potential destination in what has been a very strong uptrend.
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