The Bank of Canada (BoC) will be meeting later today to discuss the next step for Canadian monetary policy.
It remains highly unlikely that the BoC will choose to change interest rates, which currently sit at the 0.25% level.
However, while analysts and traders do not expect there to be any dramatic change to headline rates, it is likely that the release from the policymakers at the BoC will be scrutinised closely for any suggestion of a future roadmap.
A dip in the price of oil in the last few days, and the consequent effect that this has had on the value of the Canadian dollar, is likely to feed into the BoC’s thinking on these matters.
Looking at Loonie price charts more closely, its pair with the Japanese yen has thrown up some interesting moves.
The CAD/JPY pair did reach a high point of 81.44 at one stage this month, though this later saw a dip on the charts.
Since then, it has been on a fairly strong downtrend.
Analysts, however, believe that there could be a reprieve for the pair on the cards.
One strategist suggested that if the level that the currency saw in mid-July – 79.83 – becomes a support level on the charts, the fortunes of the pair could now begin to reverse.
There is also a suggestion that if the pair managed to surge even further and go beyond its 21-day daily moving average of 80.60, then its further rise could be meteoric.
From there, it could be primed to go as high as 82.13 or beyond.
If it was to head the other way, however, it could start to see itself in the realm of 77.87.
Both the Canadian dollar and the Japanese yen are also about to face a busy few days on the economic calendar front.
Japan will be in the spotlight on Wednesday evening when machinery order levels for July come out at 11:50pm GMT.
This is due to show a month-on-month change from -7.6% to +1.9%.
Year on year, however, it is due to go from -22.5% to -18.3%.
Looking ahead to Thursday, meanwhile, the day will again be rounded off by an insight into the performance of the Japanese economy.
A producer price index for August will be out at 11:50pm GMT, and is due to show a month-on-month change from 0.6% to 0.2%.
Thursday will also be a busy day for the Canadian dollar – the Governor of the Bank of Canada, Tiff Macklem, speaks at 4:30pm GMT.
Looking to next week, meanwhile, Monday morning will begin with a key data release from Japan – industrial production figures for the month of July.
This release is due to come out at 4:30am GMT.
It is widely predicted, however, that this will show no year-on-year change from its previous position of -16.1%.
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