This trade has been at the top of the charts all year
The failure of the Canadian dollar to launch immediately after the Bank of Canada decision last week was puzzling but the market got the memo (telegram?) this week.
A strong retail sales report helped to cement the momentum in the Canadian economy and the loonie. The market has also found a way to look past the latest lockdown measures while focusing on the booming commodity market.
CAD/JPY climbed 3% this week as the loonie was the runaway winner while the yen lagged G10 FX.
That same pair has been the best performer (by a longshot) in 2021 and has consistently found itself in my weekly review of the top performer. However for a couple months up until now, it had stumbled.
Techncially, the pair even looked like it might be breaking down on April 20 but quickly found a footing and went on a 5-day run this week.
The problem now is that the October 2018 high of 89.17 is just above spot.