Like several other yen crosses, the CADJPY has been trending higher since the November 2016 low. For those who don’t recall, that’s when the outcome of the U.S. elections helped flip the risk-on switch.
I’ve been tracking a few of the yen crosses as they approach multi-year resistance levels. Among them is the CADJPY.
As you can see from the monthly time frame below, the 91.50 area is a significant one.
The area provided support between April 2013 and January 2015. It even influenced the price as far back as 1997 and 1998.
A look at the price action since mid-September of last year shows how 91.50 is still having its way. It capped the September 15, 2007 advance and did so again just two weeks ago on January 5.
Now, here’s where things get even more interesting.
There’s a trend line that extends from the June 2017 lows. I mentioned it in the member’s area before Wednesday’s low at 88.22, which helped confirm the validity of the support level.
For now, it’s a matter of waiting for a daily close (New York 5 pm EST) below trend line support or above the 91.50 handle. A close below the trend line would first target 85.50 followed by 83.50. There’s reason to believe 87.75 could also become a factor.
Alternatively, a daily close above 91.50 would expose 93.25 followed by the 95.00 area.
I’m going to remain on the sideline until a favorable opportunity presents itself. Note that the BOJ is scheduled to update their monetary policy stance during Tuesday’s session next week.