Forex Market: CAD/JPY daily forecast

During yesterday’s trading session CAD/JPY traded within the range of 92.70-93.27 and closed at 92.83.

At 08:48 GMT today CAD/JPY was losing 0.1% for the day to trade at 92.74. The pair touched a daily low at 92.59 at 02:30 GMT, breaching the first support level of 92.60.

Fundamental view

The Consumer Price Index (CPI) in Canada probably rose 1.4% in March, compared to the same period a year ago, according to the median analysts’ estimate. In February, consumer prices jumped 1.1%.The CPI is an indicator that takes into account changes in consumer prices of goods and services consumed by Canadians. Obtained by comparing the prices of a basket of goods consumed by households for different periods of time. The index reflects only the net price changes, as it contains only items with the same quality and quantity compared to previous periods. The index is used as an indicator of change in core consumer prices and hence inflation. Changes in prices of goods and services are presented, according to their relative importance to the costs incurred by consumers for their acquisition. Consumer basket items are updated every four years and are derived from a household survey on savings and food costs. This is the percentage change in the index over the corresponding month a year earlier.

The Core CPI probably advanced by 1.3% in the previous month from a year ago, according to the median forecast by experts. The Core Consumer Price Index differs from the basic CPI measure as it doesn’t take into account the indirect taxes and eight most volatile components identified by the Bank of Canada- fruit, fruit and nuts; mortgage costs, natural gas and other fuels, oils and other lubricants, public transport, tobacco products and supplies. This is the percentage change compared to the same month a year earlier.

Statistics Canada will publish its monthly report at 12:30 GMT today. Higher-than-expected readings will certainly heighten the loonie’s appeal.

Technical view

According to Binary Tribune’s daily analysis, in case CAD/JPY manages to breach the first resistance level at 93.17, it will probably continue up to test 93.50. In case the second key resistance is broken, the pair will probably attempt to advance to 93.74.

If CAD/JPY manages to breach the first key support at 92.60, it will probably continue to slide and test 92.36. With this second key support broken, the movement to the downside will probably continue to 92.03.