September 23, 2021 14:22:31
Market trends are fairly positive today as events in China look to be more constructive. Evergrande shares surged on higher volumes as Beijing tried to take hold of the situation and avoid a near-term dollar bond default. Bonds are mostly lower and commodity currencies firm. This means safe havens like JPY are weaker with the hawkish Fed meeting overlooked.
CAD/JPY rebounds into trendline resistance
This pair fell sharply at the start of the week touching the lower band of the Keltner channel and support around a few pivot lows above 85. The August spike low at 84.67 was not breached which coincided with a long-term Fib level of the March 2020-June 2021 move at 84.45.
The risk-on mood has seen prices rebound with today’s advance moving above the 200-day SMA at 86.43. We are now challenging a confluence of levels including trendline resistance and the 50-day SMA around 87 and another long-term Fib level at 87.08. The MACD is still not bullish while the daily RSI is now just above 50. More gains could be tough going here with next resistance at 87.88 and then 88.21.
NZD/JPY nearing recent highs
The best performing cross today is enjoying a solid bounce off trendline resistance/support from the May highs. Both the 50-day and 200-day SMAs have also acted as good support around 77. The weekly lows at 76.33/36 now look like strong near-term support.
Buyers have touched the 61.8% Fib level of the May to August move at 78. Recent pivot highs are the next upside target at 78.63/65 ahead of the 78.6% Fib mark at 78.94. Again, the MACD is not yet bullish so first support lies at the 50% retracement level at 77.34.
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