Daily U.S. Session Watchlist: CAD/JPY

CAD/JPY hits the top of our list for the session as it consolidates ahead of weekly oil data. Will the latest oil numbers be enough to spark a breakout?

Before moving on, ICYMI, today’s Daily London Session Watchlist looked at an opportunity forming on NZD/USD as USD strengthens, so be sure to check that out to see if there is still a potential play!

Fresh Market Headlines & Economic Data:

Stocks are flat as Wall Street tries to rebound from Monday’s losses

Oil hits 11-month high towards $57 as Saudi cut supports

U.S. Small-Business Optimism Falls Sharply in December — NFIB

U.S. Job openings declined by less than forecast in November

Democrats press ahead with drive to impeach Trump after Capitol siege

Bank of England’s Ben Broadbent says U.K. economy may be better than it looks

BoE’s Bailey sees UK economy in difficult times

Upcoming Potential Catalysts on the Economic Calendar

Fed Mester speech at 5:00 pm GMT
Fed George speech at 6:00 pm GMT
API Crude oil inventory change at 9:30 pm GMT
Japan M2 Money supply at 11:50 pm GMT
New Zealand Commodity prices at 12:00 am GMT (Jan. 13)
Japan Machine Tool Orders at 6:00 am GMT (Jan. 13)

What to Watch: CAD/JPY

On the one-hour chart above of CAD/JPY, we can see a short-term uptrend in the works, but price has gone into sideways mode over the last few sessions as it trades tightly around the 81.50 minor psychological handle.

With broad risk sentiment still leaning positive and the current trend higher, the odds are in favor of the bulls at the moment until we get a fresh catalyst(s) saying otherwise.

That makes a retest of the rising lows pattern to broken previous swing area (around 81.20) the area to watch for bullish reversal candles if the pair decides to take a quick dip lower.

Of course, a break above the falling ‘highs’ pattern may also draw in longer-term trend buyers, especially if the oil inventory data coming soon comes out bullish for an already rising oil price.

For the bears, a rise in oil inventories may be enough to put short-term pressure on Loonie, and if broad risk sentiment shifts negative, then a break of the rising ‘lows’ pattern will likely be a signal to draw in both long position profit takers and fresh shorts, depending on any negative risk sentiment catalysts.

With a daily ATR of around 50 – 60 pips, a drop to the previous swing lows around 80.60 is not out of the question within a session or two with the right negative sentiment risk catalysts.

This post first appeared on babypips.com