CAD/JPY: Looks set for big breakout move
This is definitely a pair worth watching. Any escalation in Middle East violence has the possibility to greatly increase oil prices, which is of course bullish CAD, and the prospect of an LDP election win in Japan with subsequent ‘unlimited’ easing has the Yen in full-on bearish mode. The technical picture shows the 4 main MAs sitting very close together which often happens before a big move (up or down). Recent prices have traded in a 78.50/81.50 consolidation and a break out of this could increase momentum significantly. Of course the bears will have an excellent risk-reward trade by selling at the range highs with a tight stop.