CADJPY Monthly Cloud
I know, still a few days to go until end of the month BUT it is time to remind ourselves about this chart…. we have seen the 13 year trend line break in April BUT we have failed to extend the topside above the monthly cloud top and the 90.35 fibo resistance… a few breaks BUT not really able to extend the rally… in the meantime, we had a hawkish FED and the Reflation trade took a big first knock… also we have rallied some 20% since the March 2020 lows and have seen hardly any correction in this move, hence no surprise how strongly the market has reacted last week to a surprise hawk by the FED.
Of course, that does NOT yet mean that we forget all about the BOC taper story BUT it clearly has been pushed in the background since last week and might remain in the background for quite some time now…. we have seen a strong push higher in the USD, we have seen an aggressive move in Fixed income where the steepener trade started to get unwound and I expect further pressure in the JPYxxx on the downside and feel that CADJPY, AUDJPY etc.. has peaked for this cycle.
Even more, it will be very important to see if we get a monthly close below 89.05, if we do, would support my Daily chart which is really trying to correct…. I would NOT be surprised to see this cross suddenly testing the 80.00 handle again… so would suggest that we do pay attention going into month end.
CLOSE BELOW 89.05 WOULD OPEN A BIGGER CORRECTION TO AT LEAST THE 82.00 AREA
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