The Canadian dollar is the laggard today while the yen leads the way.
Traders are getting restless about the lack of movement in the market. The highlight of the day is the 35 pip move in this pair and that says plenty. Fear not, volatility always returns. When it does, this pair will be on the move.
CAD/JPY daily chart
In the short term, the break of the 55-day moving average and the challenge of the April low are key. A break lower could come on April 30 when the BOJ releases updated inflation forecasts. There is talk they could hike the forecasts but even forecasting 2.0% inflation in 2016 would kill the near-term opportunity for the BOJ to act and pull down yen crosses.
In the bigger picture, this pair has traced out a rough widening pattern, which is rare. The textbook says too look for a continuation of the prior move. In this case that would be down.
