The Japanese yen suffered big losses against other major currencies, including the Canadian dollar after the data released this morning (1/9) implied another month of contraction in Japanese manufacturing activity. The Nikkei Japan Manufacturing Purchasing Managers Index (PMI) inched up to 49.5 in August, higher than the final reading of 49.3 in July. Despite the marginal increase, the headline index remained below the 50 threshold, which marked another tightening month for the manufacturing sector.
More seriously, capital spending rose only 3.1% in the second quarter, lower than the March quarter’s 4.2% pace. Economists had been particularly upbeat about the numbers with a 5.5 % increase in the capex. This data could have an adverse impact on the second quarter GDP statistics and cast more pressure over the Bank of Japan to take monetary stimulus effort in order to boost the economy.
Fig. CADJPY H4 Technical Chart
CADJPY is tracing a slight uptick and moved nearly the 38.2% of Fibonacci retracement. The currency pair has been pierced from above by the MA10, giving the signals of a bullish market.RSI (14) lingering in a high zone, heading upwards to the overbought threshold. The buyers’ momentum is relatively strong as seen.
Fig. CADJPY H1 Technical Chart
As shown on the hourly chart, the number of up candles has been overwhelming the opposite site, however, the changes in green ones are not really significantly. This implies that the up-move is still feeble and the bull need some time to gather its energy.
In short-time, sideways around the 38.2% is likely to be the main movement. Thereafter, some crawlings to the 50.0% are awaited.
Analyses of Group Fiinvesting
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