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With little on the economic calendar, we’re checking out the trend lower on CAD/JPY, which could see some action off of upcoming oil inventory data.

Before moving on, ICYMI, today’s Daily U.S. Session Watchlist looked at a potential inverse head and shoulders setup on GBP/USD, so be sure to check that out to see if there is still a potential play!

Intermarket Update:

Equity Markets Bond Yields Commodities & Crypto
DAX: 15234.36 +0.13%
FTSE: 6890.49 +0.02%
S&P 500: 4141.59 +0.33%
NASDAQ: 13996.10 +1.05%
US 10-YR: 1.62%  -0.056
Bund 10-YR: -0.299% -0.01
UK 10-YR: 0.77% -0.01
JPN 10-YR: 0.106% -0.005
Oil: 60.38 +1.14%
Gold: 1,745.80 +0.75%
Bitcoin: $62,944.75 +4.87%
Ethereum: $2,285.95 +6.81%

Fresh Market Headlines & Economic Data:

Global stocks rise after U.S. inflation not seen rising

The NFIB Small Business Optimism Index rose 2.4 points in March to 98.2.

Consumer prices rise more than expected, pushed by 9.1% jump in gasoline

Oil rises 1% after robust China data but J&J vaccine pause weighs

German investor morale falls in April on lockdown fears, ZEW says

U.K. trade deficit narrowed by £2.1B to £6.3B in the three months to February 2021

FDA halts use of Johnson & Johnson Covid vaccine due to rare blood-clotting issues in six women

Upcoming Potential Catalysts on the Economic Calendar

API Crude Oil Inventory at 8:30 pm GMT
Japan Machinery Orders at 11:50 pm GMT
Australia Consumer Confidence Index at 12:30 am GMT (Apr. 14)
Bank of Japan Governor Kuroda speech at 6:00 am GMT (Apr. 14)
ECB Guindos speech at 7:00 am GMT (Apr. 14)
Spain Inflation Rate at 7:00 am GMT (Apr. 14)
Euro area Industrial Production at 9:00 am GMT (Apr. 14)

What to Watch: CAD/JPY

CAD/JPY 1-Hour Forex Chart
CAD/JPY 1-Hour Forex Chart

On the one hour chart above of CAD/JPY, we can see the pair has been mainly in the bears control over the month of April, but the bulls have been able to hold off the decline around the 86.50 minor psychological level. But with the pair still forming lower ‘highs’ after each bounce, are the bears about to break the bulls’ backs?

Well, the trend is currently in favor of the bears, and if we see a rise in oil inventory data later in the Asia session, that could be enough to convince traders to lean bearish on both oil and the Canadian dollar.

We’re also on alert for fresh covid headlines as the recent trend hasn’t been pretty for traders thinking the pandemic will end soon. Cases are rising across the globe at a faster pace (WHO says Covid pandemic is growing ‘exponentially’ at more than 4.4 million new cases a week) and we just got a report today that there were rare blood clotting issues with Johnson & Johnson’s covid vaccine. Covid uncertainty can certainly draw in some risk aversion behavior, which tends to be more beneficial to the yen than the Loonie.

Overall, we’re watching for bearish reversal patterns around the falling ‘high’s pattern / minor area of interest between the 87.00 – 87.25 area. If oil inventories do rise as we get bearish patterns, CAD/JPY may make a move lower, especially if covid headlines continue to lean negative.