Technical Bias: Bearish
- Canadian Dollar remained under pressure against most majors including the Japanese Yen.
- In Japan, the Nomura/JMMA Manufacturing PMI posted a disappointing reading and came in at 51.9.
- Nomura/JMMA Manufacturing PMI missed the forecast, but it was higher compared with the last reading.
- CADJPY cleared an important support trend line and remained under the bearish pressure.
The CADJPY pair faced a lot of selling pressure lately, which ignited a downside move. There was a major bullish trend line on the 4-hours chart, which was breached to open the doors for more gains in the near term. The pair is now way below the 100 and 200 simple moving averages (SMA), which means more losses are possible.
If the pair corrects higher from the current levels, then it might face resistance around the 23.6% Fib retracement level of the last drop from 95.39-93.72.
A break below the last low of 93.72 might be take the pair towards the next swing area of 93.50.
Japanese Nomura/JMMA Manufacturing PMI
Earlier during the Asian session, the Japanese Nomura/JMMA Manufacturing PMI, which gives an early snapshot of the health of manufacturing sector and considered as a significant indicator of business conditions and the overall economic condition in Japan was published. The forecast was lined up for a rise from 51.2 to 52.1 in August 2015. However, the outcome missed the mark, as it came in at 51.9, but we cannot deny the fact that it was still on the higher side.
Commenting on the report, an economist at Markit, Amy Brownbill, stated “Latest survey data indicated a further improvement in operating conditions in the Japanese manufacturing sector. New order growth accelerated to the second fastest this year so far, while production increased at a similar pace to July’s five-month record”.
We can attempt a sell trade if the CADJPY corrects higher in three waves towards the 94.00 resistance area.