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Checking out CAD/JPY for the session as volatility picks up, and ahead of potentials catalysts from upcoming oil and Japanese data.

Before moving on, ICYMI, today’s Daily London Session Watchlist looked at an opportunity forming on EUR/JPY ahead of economic updates from the eurozone, so be sure to check that out to see if there is still a potential play!

Intermarket Snapshot

Equity Markets Bond Yields Commodities & Crypto
DAX: 12591.69 -1.11%
FTSE: 6185.42 -1.60%
S&P 500: 3175.90 -0.12%
DJIA: 26107.03 -0.68%
US 10-yr 0.671%  -0.013
Bund 10-YR -0.431% +0.001
UK 10-YR: 0.179% -0.023
JPN 10-YR: 0.041% +0.004
Oil: 40.72 +0.22%
Gold: 1807.50 +0.78%
Bitcoin:9252.50 -1.02%
Ethereum: 237.40 -1.58%

Fresh Market Headlines & Economic Data:

U.S. Job Openings Unexpectedly Increase as Hires Climb to Record

U.S. Economic Optimism Drops Again; Now at Lowest Level Since September 2015

Fed official Bostic: U.S. economic recovery may be leveling off

Canada’s Ivey PMI shows purchasing activity expanding for first time in four months

French Trade Balance deficit increase to -7.1B euro in May 2020

Italian retail trade index rose by 24.3% m/m (seaonally adjusted) in May 2020

U.K. House prices fall -0.1% m/m in June, the fourth straight month of declines

EU wants Brexit deal ‘but not at any price’ as teams head for dinner

Oil Near $40 With Volatility Falling and Gasoline Stocks Growing

Upcoming Potential Catalysts on the Economic Calendar for U.S. & Asia:

Fed Quarles speech at 5:00 pm GMT
Fed Daly & Barkin speeches at 6:00 pm GMT
API Crude oil inventory change at 8:30 pm GMT
Japan Current account & Bank lending at 11:50 pm GMT
Japan Economy Watchers Sentiment at 5:00 am GMT

What to Watch: CAD/JPY

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

On the hourly chart above, we’ve got CAD/JPY moving sideways over the past month and tightening up even a bit more over the last week. So, we see clear levels where traders could find short-term support/resistance opportunities or breakout points if we get a strong catalyst for volatility.

Up ahead, the economic calendar is light on top tier potential catalysts, but we may see some action for the Loonie from the upcoming API crude oil inventory report. This can be a short-term market mover for the Loonie as moves in the oil market tend to influence the Canadian dollar’s bias on most occasions.

We’ve also got economic / sentiment updates from Japan later in the Asia session; they’re not usually market movers, but it’s something to be aware of in case we see a massive deviation from expectations.

So for CAD/JPY bulls, a decrease in oil inventory could spark Loonie support, making the current pattern of rising lows down to the major psychological level (79.00) an area to watch for bullish reversal patterns.

An upside break of the recent swing highs (around 79.60) is also something to watch, but given the daily ATR of around 65 pips, a break there may not have much legs on the session.

For CAD/JPY bears, a higher oil inventory number may draw in CAD bears, making the current break of rising ‘lows’ attractive to short-term players. But it’s probably best to wait-and-see if 79.00 can be broken with strong momentum before considering a short position.

If the top of the range is retested before the numbers, then bearish reversal patterns there (around 79.60) may be a signal that draws in technical traders for a short-term play to the downside.

Of course, coronavirus updates and geopolitical news are always a potential market driver for risk sentiment and the Japanese yen these days, so watch out for any updates that may potentially influence CAD/JPY moves!