Key Points
- The Canadian Dollar is trading below a key support area at 81.50 against the Japanese Yen.
- There is a descending channel pattern with support at 80.85 formed on the hourly chart of CADJPY.
- Today in Japan, the Trade Balance figure for April 2017 was released by the Customs Office.
- The outcome was below the forecast, as there was a trade surplus of ¥553.6B, which was less than the last ¥865.5B.
CADJPY Technical Analysis
The Canadian Dollar faced a lot of selling pressure lately and moved below the 82 and 81.50 support levels against the Japanese Yen. The CADJPY pair even moved below the 21 hourly simple moving average and traded as low as 80.83.
There is a descending channel pattern with support at 80.85 formed on the hourly chart of CADJPY. As long as the pair is following the channel, there can be a decline towards 80.90.
On the upside, the channel resistance at 81.40, the 21 hourly SMA, and the 81.50 pivot are crucial resistance levels for the Canadian Dollar buyers. One may even consider selling rallies towards 81.40 with a tight stop of around 20-25 pips.
Japanese Trade Balance BOP Basis
Recently in Japan, the Trade Balance figure for April 2017 was released by the Customs Office. The market was positioned for a trade surplus of above ¥600B in April, compared with the last ¥865.5B.
The result was below the forecast, as there was a trade surplus of ¥553.6B, which was less than the last ¥865.5B. Looking at the Current Account released by the Ministry of Finance for April, there was a trade surplus of ¥1,951.9B, which was better than the forecast of ¥1,698.8B.
Overall, CADJPY may struggle in the near term as long as the pair is below the 81.50 resistance area.
