Forex Market: CAD/JPY daily trading forecast

Yesterday’s trade saw CAD/JPY within the range of 95.97-96.49. The pair closed at 96.31, gaining 0.04% on a daily basis.

At 8:40 GMT today CAD/JPY was down 0.02% for the day to trade at 96.28. The pair touched a daily low at 96.13 at 6:35 GMT.

Fundamental view

Canada

The surplus on Canadian trade balance probably contracted to 0.900 billion CAD during July from 1.860 billion CAD in the prior month, which has been the largest surplus since December 2011. In June total exports increased 1.1% to the record high 45.2 billion CAD due to sales of metal and non-metallic mineral products, consumer goods, and energy products. Total imports dropped to 43.3 billion CAD.

The trade balance, as an indicator, measures the difference in value between nation’s exported and imported goods and services during the reported period. It reflects the net export of goods and services, or one of the components to form country’s Gross Domestic Product. Generally, exports reflect economic growth, while imports indicate domestic demand. In case the trade balance surplus shrank more than expected, this would have a bearish effect on the Canadian dollar. Statistics Canada will release the official trade data at 12:30 GMT.

Yesterday Canadian dollar found certain support against peers, after Bank of Canada left monetary policy unchanged in line with expectations.

Japan

Bank of Japan left monetary policy without change at its two-day meeting, concluded earlier in the day. This decision came as no surprise, as BoJ Governor Haruhiko Kuroda said earlier, that economy was on the right course, despite the negative effects, caused by the increased sales tax in April. The central bank, however, revised down its housing sector outlook, as the segment is still experiencing difficulties.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 96.26. In case CAD/JPY manages to breach the first resistance level at 96.54, it will probably continue up to test 96.78. In case the second key resistance is broken, the pair will probably attempt to advance to 97.06.

If CAD/JPY manages to breach the first key support at 96.02, it will probably continue to slide and test 95.74. With this second key support broken, the movement to the downside will probably continue to 95.50.

The mid-Pivot levels for today are as follows: M1 – 95.62, M2 – 95.88, M3 – 96.14, M4 – 96.40, M5 – 96.66, M6 – 96.92.

In weekly terms, the central pivot point is at 95.42. The three key resistance levels are as follows: R1 – 96.34, R2 – 97.01, R3 – 97.93. The three key support levels are: S1 – 94.75, S2 – 93.83, S3 – 93.16.