The sentiment behind this trade is more focused towards CAD weakness than Yen strength due to Saudi Arabia and Russia only willing to freeze output at January levels and not cut. Iran has also stated that they are not willing to freeze output as they attempt to get their market share back to pre-sanction levels. With so many countries not willing to lose their chunk of the demand it will be tough to see where any agreement is made to cut output. The Yen remains fundamentally weak but is probably best suited for strength with current market conditions still favouring risk off sentiment and oil being a big driver of this and also affecting equity performance. Although Canadian CPI slightly beat expectations on Friday it failed to really make any impact due to the poor oil outlook. Friday’s CFTC report showed net short positions decreasing by -7k but did show net JPY long positions increasing by almost 5k.
The pair remains in a downtrend with the 50,100,200 MA all aligned to confirm. There is a dating back to 2009 around the 77.00 region.
There is no tier one data until Wednesday when we have crude oil inventories. Thursday we have Japan’s CPI readings.
The pair retrace further than anticipated with some risk on sentiment or any new developments with oil output.