Key Points
- The Canadian Dollar started a downside move after trading towards 89.40 against the Japanese Yen.
- There is a descending channel pattern with resistance near 87.60-70 forming on the hourly chart of CADJPY.
- Today in Japan, the Leading Economic Index (Prelim) for June 2017 was released by the Cabinet Office.
- The outcome was above the forecast, as there was a rise from the last reading of 104.7 (revised) to 106.3.
CADJPY Technical Analysis
The Canadian Dollar after facing sellers above the 89.30 level against the Japanese Yen started a downside move. The CADJPY pair declined heavily and moved below the 88.50 and 88.00 support levels, and the 21 hourly simple moving average.
The pair is currently following a descending channel pattern with resistance near 87.60-70 on the hourly chart. The channel resistance near 87.60 also coincides with the 21 hourly simple moving average.
The pair recently failed to break the 50% Fib retracement level of the last wave from the 87.35 low to 88.01 high. The channel resistance is acting as a strong barrier and stopping buyers from taking the pair above the 87.70 level. On the downside, the 87.40-30 levels is an initial support zone.
Japan’s Leading Economic Index
Today in Japan, the Leading Economic Index for June 2017 was released by the Cabinet Office. The market was positioned for a minor rise from the last reading of 104.6 to 105.0.
The actual result above the forecast, as there was a rise to 106.3 (Prelim). The last reading was also revised up from 104.6 to 104.7. Looking at the Coincident Index (Prelim), there was a rise from the last reading of 115.8 to 117.2 in June 2017.
Overall, the CADJPY pair may continue to decline in the near term and could even trade below 87.35.
