CADJPY Forming Falling Wedge

CADJPY is currently forming a falling wedge pattern, which is often seen as a bullish reversal setup after a corrective decline. On the chart, price has pulled back from recent highs and is now compressing within descending support and resistance lines, showing decreasing volatility and seller exhaustion. This type of price action generally signals that buyers may soon step back in, especially if the pair breaks out above the wedge resistance with strong momentum. As a professional trader, I am monitoring the pattern for a potential upside continuation if the breakout confirms with volume and candle body expansion.

Fundamentally, CADJPY remains influenced by diverging central bank sentiment. The Bank of Canada continues to maintain a controlled policy stance as inflation remains stable within the expected range, while the Bank of Japan still operates with ultra-loose monetary policy. This interest rate differential keeps CADJPY attractive to carry traders and supports long-term bullish structure. If energy prices stay firm and Canada benefits from positive global risk sentiment, CADJPY could continue gaining strength after the wedge breakout.

However, short-term corrective movement is still visible as the market responds to profit taking and global risk fluctuations. If the wedge fails to break upward, price may retest lower support levels for liquidity before a new bullish trend leg begins. I remain focused on price reaction near structure, as break-and-retest confirmation will be key for high probability long positions.

On TradingView, falling wedge and CADJPY forecast are currently highly searched topics, reflecting strong interest in potential trend continuation setups across the Forex market. With a clean pattern, strong fundamentals, and supportive long-term structure, CADJPY holds the potential for profitable bullish opportunities once confirmation appears.