"Three reasons to buy Canadian dollars" ~Canadian dollar buying strategy~
◎ Canadian Dollar Buy Strategy
・ CAD/JPY Buy Position (Short-term)
Entry 83.50 to 83.70 JPY
Settlement Point 84.00 or 84.50
・ CAD/JPY Buy Position (Long-term)
Entry 83.50 to 83.70 JPY
Settlement Point 86 or 87
◎ Technical
CAD/JPY Daily Chart
CAD/JPY Timeframe Chart
Reason to Buy Canada ① Technical
Looking at the daily chart, it appears to be in a range between 82 and 87 yen. Within the range, it seems near the lower bound, so there could still be upside potential. In the long term, I think it can target 86 or 87 yen.
Looking at the intraday chart, after briefly breaking below the parallel channel, it has returned inside the channel. The next resistance is likely the red line. It would be fine to consider settling at the red line, or at the upper bound of the channel.
◎ Fundamentals
WTI Crude Oil Price Daily Chart
Reason to Buy Canada ② Fundamentals (Oil Price)
The WTI crude price and the CAD/JPY daily chart appear to have a slight correlation.The Canadian dollar is a currency highly influenced by oil prices (high correlation).
Oil prices briefly fell into the $40s, but quickly recovered to the $50s. For oil-producing nations, a price in the $40s makes profitability difficult, so production would adjust. Considering that, unless something extraordinary happens,$50 is likely to be a support leveland therefore could also support the Canadian dollar.
Reason to Buy Canada ③ Fundamentals (Rate Hike Expectation)
Also,when comparing major currencies, only the US and Canada are in a rate-hike (tightening) phase. The US is adjusting the pace of tightening. Therefore, the remaining possibility of rate hikes is limited to Canada. If expectations for a Canadian rate hike rise, the Canadian dollar buying pressure will strengthen.
Last week's Canadian employment data were very strong. When expectations for rate hikes rise, I intend to lock in profits firmly.
Hope for crude price support and premature entry to anticipate rate hikes!
◎ Current Position
Personally, the entry points above are considered as timing for adding positions.
Currently holding a CAD/JPY long position.
CAD/JPY 81.80 JPY Long Position
As mentioned below, I have been holding this for about a month. While adjusting the position,there is no need to worry about swap interest, so I want to hold until the expectation for rate hikes disappears.
Bank of Canada keeps rates unchanged as expected! ~ CAD Buy Strategy ~
Important Canadian Indicator, CPI (Consumer Price Index) Release! ~ Jan 18 CAD Buy Strategy ~
