March 24, 2022 15:41:07
There is much attention on the exceptionally extended selloff in the yen this week. The record number of up days in CAD/JPY is showing no end in sight. But one CAD cross could be moving higher with a delayed potential breakout.
Firmer crude oil is helping support the loonie. A bid in stock markets also supports CAD with the Vix, Wall Street’s “fear gauge” fairly stable around 23. This is only just above its long-term average around 20.
Decent domestic economic growth and generally stronger commodities will see tighter BoC monetary policy ahead. Seasonals also support CAD in the second quarter.
CAD/CHF continuation pattern holding, for now
After briefly sinking, but then holding 0.72, prices moved sharply higher in the middle part of this month. The pair crossed up through long-term SMAs between 0.7266 and 0.7297.
The strong bullish momentum has paused more recently. But resistance at 0.7385 from the August high has been beaten and now acts as support.
Today, bulls are trying to make another break higher. The main upside target is the October high at 0.7495. But there is a strong area of congestion around here from July and May 2021. The April high sits just above at 0.7528 with next resistance at 0.7630.
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