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CADJPY Moves to Test Trend Line Support Ahead of BOC

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The CADJPY finds itself at a crossroad ahead of the upcoming BOC rate statement. The pair is approaching a trend line that extends from the November 11th low just hours before the BOC takes center stage at 10 am EST.

But first, let’s review what got us here.

After putting in a low of 74.81 following the November 9th U.S. elections, the yen cross has gained an impressive 1,165 pips. There’s no doubting the fact that buyers have been in control for the past four weeks.

But recent pressure on the trend line below suggests that the pair may be due for a correction. This wouldn’t be shocking considering buyers have enjoyed twenty sessions without a healthy pullback.

While I’m by no means bearish here, it does seem that a break of trend line support could bring us back to 82.20.  This area served as key support between April and June before flipping to resistance in July.

On the other hand, a push higher would expose the April highs near 88.80. This area also acted as support in August and September of last year.

I’ll be on the sidelines during the BOC statement to avoid the volatile uncertainty that accompanies every rate decision. But it does seem that this trend line is the line in the sand between buyers and sellers. And with a bit of patience, it could offer an opportunity in the coming days.

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CADJPY trend line

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