The value of one Canadian Dollar in Japanese Yen (CAD/JPY) has turned the corner rallying near 2% in the last 10 trading days. On Tuesday it was up 'big' as its five-day moving average crossed above its 20-day moving average and closed at ¥104.625. The exchange rate is sitting right in the middle of its four-month range, and EventEdge is indicating that it is headed back up to the top of the range.
Q: How has the exchange CAD/JPY responded to a 'big' rally that sees the five-day MA cross above the 20-day moving average when the exchange was down on the day one day ago?
A: According to the 16 previous occurrences of this event omitting any repeat occurrences within 10 trading days, EventEdge indicates that CAD/JPY has shown a strong bullish edge that peaks eight trading days after the event. Thus, the projected date for the peak of the bullish edge relative to the current event date (Tuesday, Aug. 26, 2008) is Monday, Sept. 8, 2008.
CAD/JPY rallies in 88% of the cases (14 of 16) by an average of 1.7% relative to the close on the event date. The average of the two declines is 0.6%. The overall return of the 16 cases is 1.4%, which, based on the close of CAD/JPY on the event date (¥104.625), provides a target price of ¥106.0897.
To see this in EventEdge® click here.
Mickey Schoenhals is an analyst with Markethistory.com.
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