Oil surges, BoJ remains dovish & bitcoin stays in range
CAD/JPY => The pair trades at a 7 year high
BTC/USD => The cryptocurrency holds above 40k
Oil => The commodity rises over $100
CAD/JPY traces oil higher, BoJ stays dovish
CAD/JPY rose for a 7th straight day on Thursday, as the loonies traced oil prices higher, and the yen came under pressure ahead of the BoJ interest rate decision.
As expected, the BoJ voted to keep interest rates unchanged and maintain its huge stimulus support. Japan unlike most other countries does not have a problem with runaway inflation.
Inflation in Japan remains below the central bank’s 2% target.
Today the pair is rising as oil prices continue to gain. Oil trades up 10% in two days. Looking ahead Canadian retail sales for January are in focus. Expectations are that retail sales recovered in January after contracting in December amid the wave of Omicron.
Strong sales data in addition to the hot inflation figures and encouraging jobs data released earlier in the week will pile pressure on the BoC to raise interest rates again.
Where next for CADJPY?
After trading range-bound across the first three months of the year, CAD/JPY broke out of the holding channel and trended higher to a 7 year top.
The price trades above is 50 & 100 sma. However, the RSI is in overbought territory so the price could consolidate or even edge lower before further gains.
Buyers will be looking for a move to 99 the August 2015 high before a move to 98.50 the July 2015 high, a break above here open the door to 100.00 round number.
Sellers would be looking for a move below support at 92.30 the negate the near-term uptrend and below 89.60 to change the bias to bearish.
Bitcoin holds over 40k post-Fed
Despite plenty of supportive news out this week Bitcoin continues to trade uncharacteristically calmly.
Whilst US stocks managed to hold onto their post-Fed rally, the cryptocurrency has struggled. News that Ukraine legalise Bitcoin and other cryptocurrencies had little noticeable effect.
BTC/USD remains above 40k, however, it also continues to trade below its 100 sma and shows little danger of breaking out of the 37000 – 45000 trading range which it has traded in over the past few months, as longer-term buy and hold bitcoin traders are being offset by short term sellers.
If the price did break above 45,000, then 53,500 could be the next upside target.
Oil rises 10% in 2-days
After three days of declines, oil prices jumped 8% higher yesterday and are continuing to rise today.
Comments from the Kremlin that peace talks weren’t progressing well, in addition to a warning from the EIA on supply, sent oil back to $100.
The EIA warned that 3 million barrels per day of Russian oil could be shut off from supply from next month, whilst higher fuel costs would only cut demand by around 1 million barrels per day.
Today attention will remain on peace talks which appear to be stalling. Baker Hughes rig count data is due later.
Support can be found at 100.00 (psychological level) and 94.30 (50 sma).
Resistance for the pair can be seen at 110.00 (11 March high) and 115.00 (10 March high).
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