The Canadian Dollar has benefited immensely from sustained higher energy prices as well as a rebound in risk appetite over the past two weeks.
After trading in a symmetrical triangle that had formed since September 2021, CAD/JPY rates have burst higher over the past three weeks, rising to their highest level since June 2015. These gains have been in-line with longer-term expectations, as its been noted multiple times in recent months that “as the preceding move was higher, the ultimate resolution of the symmetrical triangle is eyed for a bullish breakout – consistent with the bigger picture rally above the descending trendline from the November 2007 (all-time high) and December 2014 highs.”
The pair is above its daily 5-, 8-, 13-, and 21-EMA envelope, as well as its weekly 4-, 8-, and 13-EMA envelope, both of which are in bullish sequential order. Weekly MACD continues to rise above its signal line, while weekly Slow Stochastics are holding in overbought territory. Having reached the 76.4% Fibonacci retracement of the 2015 high/2020 low range, CAD/JPY rates may experience a near-term pullback that would setup an opportunity to look long again given the momentum structure.
After trading in a symmetrical triangle that had formed since September 2021, CAD/JPY rates have burst higher over the past three weeks, rising to their highest level since June 2015. These gains have been in-line with longer-term expectations, as its been noted multiple times in recent months that “as the preceding move was higher, the ultimate resolution of the symmetrical triangle is eyed for a bullish breakout – consistent with the bigger picture rally above the descending trendline from the November 2007 (all-time high) and December 2014 highs.”
The pair is above its daily 5-, 8-, 13-, and 21-EMA envelope, as well as its weekly 4-, 8-, and 13-EMA envelope, both of which are in bullish sequential order. Weekly MACD continues to rise above its signal line, while weekly Slow Stochastics are holding in overbought territory. Having reached the 76.4% Fibonacci retracement of the 2015 high/2020 low range, CAD/JPY rates may experience a near-term pullback that would setup an opportunity to look long again given the momentum structure.