CADJPY Bullish

3 dic

Fundamental Analysis
Bullish CAD Factors:

Oil Prices:

• Canada’s economy is heavily reliant on oil exports. Rising oil prices typically strengthen the CAD.
  
• If crude oil prices rebound, CADJPY could move higher.
  Economic Outlook:
• Recent data might indicate improving Canadian GDP growth or employment figures, supporting CAD strength.
  
• The Bank of Canada’s monetary policy stance (e.g., potential rate hikes or a neutral tone) can boost CAD sentiment.
  

Bearish JPY Factors:

BOJ Monetary Policy:

• The Bank of Japan continues its ultra-loose monetary policy, suppressing JPY strength.
  
• Low interest rates and yield curve control weaken the JPY compared to higher-yield currencies like CAD.
  

Risk-On Sentiment:

• During December, markets often exhibit a "Santa rally" (bullish equities). Risk-on sentiment favors CAD over the safe-haven JPY.
  
• Seasonality:
  

Historically, CADJPY trends bullish in mid to late December due to:
Increased demand for risk assets.
Seasonal oil demand, which strengthens CAD.
Year-end positioning and reduced JPY demand in global markets.

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Technical Analysis

• The CADJPY chart indicates bullish divergence on the RSI.
  
• Price is making lower lows while RSI is making higher lows, suggesting a potential reversal.
  
• The pair is testing a strong support zone around 105.00–106.00.
  
• Historical price action shows that this level has acted as a significant support in the past.
  
• A falling wedge pattern is forming:
  
• This is a bullish reversal pattern, indicating that a breakout to the upside is probable.
  
• Bullish divergence near the oversold region signals buying pressure is increasing.
  
• Increasing volume near the support zone may confirm a breakout to the upside.