When most currency pairs are trading in narrow ranges, the Canadian dollar and the Japanese Yen are standing out with exceptional strength. This makes the CAD/JPY very interesting.
EUR/USD, GBP/USD and USD/CHF have been consolidating for a long time. No one knows when they will “explode”. For example, EUR/USD is trading sideways between 1.3750 and 1.42 for more than six weeks.
The same patterns happen in the Aussie and the Kiwi. AUD/USD is trading 0.77-0.82 for two months now.
The Canadian dollar is different. At the beginning of this week, it began a very sharp move: USD/CAD fell from 1.1670 to 1.1120. This sharp move wasn’t followed by other currencies.
Also the Japanese Yen is different: USD/JPY also broke a strong technical support line, and plunged below 92. The move began last week, and didn’t happen elsewhere.
These two currencies, the Canadian dollar and the Japanese Yen, made independent moves at different times. This makes the CAD/JPY very interesting.
When the Yen made its move, this cross broke an uptrend support line: CAD/JPY fell from 82.50 to 78.50. When the Canadian dollar made the move, this trend was reversed: CAD/JPY made a flight up to 84.50.
These sharp swings are fascinating at these rather slow summer times most majors and minors are in a range.
Looking at the graph, CAD/JPY looks like its going to dive again. It has resistance from what previously played as a support line. After breaking it, the way is down. Still, these independent moves mean that sharp and unexpected moves can happen.
I’ll continue following this pair, at least until the majors get a direction, until the dollar gets a new direction.
Personal note: I’m back from my vacation, and I’m starting out with this post. On the weekend, I hope to return with the links post, and get back to weekly and daily reviews, as well as other blog posts.