Listen to the latest market mood for the CADJPY pair:
The Japanese Yen remains strong medium-term due to the Coronavirus fears; expect sellers on any medium-term pullbacks in the JPY today.
The CAD has been weak on a dire outlook for oil. Falling demand, oversupply, and a Saudi price war have all weakened oil prices by around 45% this month. The Bank of Canada cut interest rates last week from 0.75% to 0.25% and launched its first quantitative easing programme consisting of C$5 billion of government bonds across the curve in the secondary market. They also spoke about the possibility of negative interest rates last week which invites further CAD sellers. As a result, we expect CAD sellers in the medium term.
Expect sellers on deeper pullbacks on CADJPY.
We expect this outlook to play out over the next 2-3 days.
The main risk to this setup remains to be any positive coronavirus news which would send the market back into a risk-on mood and JPY buyers will disappear.