CADJPY at resistance

The Canadian dollar has been rising recently due to higher oil prices. As Canada is one of the biggest oil exporter countries in the world, oil prices strongly influence its economy and currency. The latest rally started in January from a resistance level which was broken when the course rose above the 82.00 level (C). As demand for oil has been steady this year, the loonie (the Canadian dollar´s nickname) kept rising too. As stock markets hit new record highs thanks to huge stimulus packages in th US, Europe and Japan as well, investors turned to riskier currencies (AUD, NZD) and left safe haven currencies as the Japanese yen behind.

Thus, the CADJPY pair had all the conditions for climbing higher and is trading now at the 88.00 – 89.00 resistance level (A) on the weekly chart, which was formed in September 2018. If the bulls pushed the course through this level, it could rise to a three year old resistance level in the 91.00 – 92.00 zone (B). On the other hand, if resistance A proved to be a strong level, the course could bounce back to the downside and fall to resistance C. It would be supported by the RSI too, which is showing an overbought level around 80.