CAD/JPY was trading higher continuously for past 10 trading days. The pair jumped nearly 250 pips from the low of 82.21. The pair has shown a minor decline after hitting high of 84.92 as markets eye Bank of Canada monetary policy today for further direction. The housing starts and building permits data released was much better than expected.
Market expects Bank of Canada to hike rates by 25bpbs to 1.5% which will be 4th rate hike since last summer. Market already priced rate hike direction of Canadian dollar depends BOC ‘S outlook on the economy. Any hawkish statement by BOC will drag the loonie further down.
On the higher side, any break above 85 will take the pair to next level till 86.26 (200- day MA)/87.10.
The near term support is around 84.20(55- day EMA) and any break below targets 83.60/82.90 (61.8% fib).
It is good to buy above 85 with SL around 84.20 for the TP of 86.26/87.