CADJPY Keeps GoingThe recent CADJPY breakout idea has now hit its second target. Price has made a more than 5% move higher over the last week as risk appetite rebounds. CAD, along with other higher-yielding currencies, has benefitted from better risk sentiment, while JPY has seen a sharp move lower amidst weakened safe-haven inflow. Additionally, the divergence in central bank policy expectations between the BOC and BOJ has been thrown back into focus, with the market bracing for further BOC hikes in the coming month, likely to keep CAD well supported.With the retail market heavily short the pair and with both MACD and RSI firmly bullish, there is room for the current move to continue. For those holding longs, look to maintain bullish view towards 97.45 while 94.06 holds as support.Keep An Eye OnThe current risk backdrop looks likely to remain the most important driver for this pair. While risk appetite remains buoyant, expect CAD to continue to find demand, with JPY expected to stay weak on reduced safe-haven inflow.On the data front, little of note for CAD. JPY sees BOJ meeting minutes and PMI sets later in the week, though unlikely to do much to impact JPY given the current market themes.
Source: Tickmill