UBS Projects Mixed Market Outlook for 2025 Amid Trump Policy Uncertainty 
Goldman Predicts 50% Odds of 10% U.S. Tariff on Copper by Q1 Close 
BOJ Policymakers Warn Weak Yen Could Fuel Inflation Risks and Delay Rate Action 
U.S. Stocks vs. Bonds: Are Diverging Valuations Signaling a Shift? 
Gold Prices Slide as Rate Cut Prospects Diminish; Copper Gains on China Stimulus Hopes 
China’s Growth Faces Structural Challenges Amid Doubts Over Data 
Energy Sector Outlook 2025: AI's Role and Market Dynamics 
BOJ Rate Decision in Focus as Yen Weakness and Inflation Shape Market Outlook 
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
ECB’s Cipollone Backs Digital Euro as Europe Pushes for Payment System Independence 
Trump’s "Shock and Awe" Agenda: Executive Orders from Day One 
Indonesia Surprises Markets with Interest Rate Cut Amid Currency Pressure 
RBA Deputy Governor Says November Inflation Slowdown Helpful but Still Above Target 
CADJPY slides past 84.500 levels, heading towards to hit 3-months lows after a dovish statement from the Bank of Canada (policy rate unchanged at Wednesday’s meeting). Investors slashed odds of future rate hikes after the central bank noted that “there may be additional room for non-inflationary growth”. Watch out for Poloz’s scheduled appearance later today (13:35 GMT) for further cues.
Technical Glance: Technically, on a broader perspective, the consolidation phase since December 2015 in the major trend of CADJPY most likely to form head & shoulder pattern which is bearish in nature, while bears nudge price below EMAs (refer weekly plotting). However, we cannot afford to disregard the bullish attempts unless it breaches below 83.795 levels where it acts as the strong support as shown in the weekly technical plotting.
Options Trading Strategy (CADJPY): Contemplating above factors, although it is sensed that all chances of Japanese Yen may look superior over Canadian dollar in the near-term future; we advise balanced-hedging perspective but to favor slightly CAD’s depreciation through below recommendations.
We’ve been firm to hold on this strategy on both trading as well as hedging grounds, unlike spreads, combinations allow adding both calls and puts at a time in our strategy.
Buy 2 lots of 1m at the money delta put option and simultaneously, buy at the money call options of similar expiries. It involves buying a number of ATM calls and double the number of puts. Please be noted that the option strip is more of customized version of options combination and more bearish version of the common straddle.
Huge profits achievable with this strategy when the underlying currency exchange rate makes a strong move on either downwards or upwards at expiration, but greater gains to be made with a downward move. Hence, any hedger or trader who believes the underlying currency is more likely to slide downside can go for this strategy. Cost of hedging would be Net Premium Paid + brokerage/commission paid.
Currency Strength Index: FxWirePro's hourly CAD spot index is inching towards -109 levels (which is highly bearish), while hourly JPY spot index was at 35 (bullish) while articulating (at 06:46 GMT). For more details on the index, please refer below weblink:
