The Canadian dollar (CAD) fell for the third consecutive day against the Japanese Yen (JPY), bringing the CAD/JPY pair’s price below 88.00 ahead of the Bank of Canada’s (BoC) interest rate decision.
The Bank of Canada anticipates releasing numbers concerning the interest rate decision news on Friday (July 15, 2021). According to economists’ consensus, the central bank’s rate news registered a reading of -0.1% this month while bearing no change compared to the reading of the month before.
The interest rate decision helps in quantitative easing. If the bank remains hawkish towards the inflationary outlook of the country’s economy and raises interest rates, it signals economic growth. On the other hand, If BoC adopts a dovish view, it means economic contraction. Generally speaking, the higher reading suggests a bearish market for the CAD/JPY currency pair and vice versa.
As of this writing, the CAD/JPY pair consolidates around 87.58, with multiple resistance levels seen ahead on the daily frame chart. The price might face critical obstruction near these spots(as shown in the given picture).
On the other hand, there has been upcoming news about retail sales that are projected to release on July 23, 2021, hence there are chances that CAD/JPY might not remain bearish.
Conclusion
Taking into account the pair’s price action over the last few days, buying it around the current level could yield some short-term gains.