- CAD/JPY struggles to extend seven-day uptrend near the highest levels since 2015.
- Oil price recovery, cautious optimism previously favored bulls.
- Sluggish markets, wait for BOJ tests further upside of late.
- Canada Retail Sales, geopolitical headlines will also be important for fresh impulse.
CAD/JPY bulls keep eyes on the Bank of Japan (BOJ) monetary policy decision while flirting with the seven-year high around 94.00 during Friday’s Asian session. In doing so, the cross-currency pair pauses after consecutive seven days of an uptrend.
In addition to the pre-BOJ anxiety, mixed concerns over the Ukraine-Russia peace talks and China’s step back from the previous readiness to an easy regulatory crackdown on the property and IT companies also challenge CAD/JPY.
Furthermore, easing in prices of Canada’s main export, WTI crude oil also negatively affects the pair’s moves. The black gold rose the most in two weeks the previous day before recently easing to $103.30. Sour sentiment and IEA comments may have tested the commodity bulls of late.
Elsewhere, the Bank of Japan (BOJ) has already signaled its readiness to keep the easy money flow continue and part ways from the global central banks, which in turn allows traders to prepare for a positive surprise and hence propel the pair before the event.
Looking forward, BOJ and the geopolitical headlines won’t be enough to predict CAD/JPY as Canada’s Retail Sales release for January is also on the calendar for publication. Should the key data match upbeat expectations of 2.4% MoM, versus -1.8% prior, the pair may have an additional reason to refresh the multi-day high.
A fresh buying in the CAD/JPY pair can wait for a clear run-up beyond the 94.00 threshold. Following that the bulls can aim for an upward sloping trend line from May 2021, near 94.70.
On the contrary, the year 2021 peak near 93.00 restricts the short-term downside of the pair.