With Japan’s lower house election leading to the ruling party losing its majority, the yen saw selling pressure, pushing CAD/JPY (Canadian Dollar/Yen) up to 110.72. However, this was followed by a drop in crude oil prices as Israel did not proceed with an attack on Iranian oil facilities, limiting further gains for the Canadian dollar. Despite this, as the New York and Canadian stock markets remained strong, the yen weakened in a “risk-on” mood, and CAD/JPY rebounded to close at 110.39.
The high point reached in the Tokyo market, around 110.72, is also near the 200-day moving average and the upper limit of the Bollinger Bands, suggesting it may have hit a temporary ceiling. Due to ongoing uncertainty in Japan’s political situation, yen weakness may not last long, so it’s recommended to adopt a selling stance near 110.70.
Expected CAD/JPY Range: 110.70 – 109.40
Note: The above is not a guarantee of profits. Please make trading decisions at your own risk.