CADJPY Sellers Target Key Support as Momentum FadesCADJPY has slipped after failing to sustain momentum above the 107 handle, and the price action now leans toward renewed downside pressure. The chart structure shows repeated rejections and lower highs forming, which opens the door for a deeper pullback. With oil prices struggling to hold gains and JPY catching periodic safe-haven bids, this cross looks vulnerable to further declines.
Current Bias
Bearish – CADJPY is showing weakness with sellers eyeing lower support levels.
Key Fundamental Drivers
CAD: Weak Canadian labor market data and rising BoC rate cut expectations pressure CAD. Oil prices remain soft, removing an important support pillar.
JPY: The yen continues to benefit from safe-haven demand, especially during global risk-off waves and BoJ’s gradual steps toward yield control adjustments.
Yield spreads: Narrowing spreads between CAD and JPY rates reduce CADJPY’s carry appeal.
Macro Context
Interest rates: The BoC is leaning dovish after weak jobs and growth numbers, while the BoJ’s cautious shift away from ultra-loose policy provides structural support to the yen.
Growth trends: Canada faces slowing growth amid weaker domestic demand, while Japan’s growth remains modest but steady.
Commodities: Oil weakness weighs on CAD.
Geopolitical: Risk-off events (tariff disputes, Middle East tensions) tend to favor JPY strength, amplifying CADJPY downside.
Primary Risk to the Trend
A sharp recovery in oil prices or a stronger-than-expected Canadian economic release could lift CAD and cap downside momentum in this pair.
Most Critical Upcoming News/Event
Canada CPI and retail sales for confirmation of BoC’s dovish outlook.
BoJ policy commentary for clarity on yield control and inflation stance.
Leader/Lagger Dynamics
CADJPY tends to act as a lagger, often following broader risk sentiment and oil price movements. It also reacts to USDJPY moves, meaning JPY flows largely set the pace.
Key Levels
Support Levels: 105.95, 104.98
Resistance Levels: 106.93, 107.54
Stop Loss (SL): 107.54 (above resistance zone)
Take Profit (TP): 104.98 (major support)
Summary: Bias and Watchpoints
CADJPY bias is bearish, with SL set at 107.54 and TP aimed at 104.98. Oil weakness, dovish BoC expectations, and resilient JPY flows all lean in favor of further downside. The key watchpoints are Canada’s CPI/retail sales and BoJ commentary. Unless oil rebounds strongly, sellers are likely to stay in control, with price action favoring a test of 105.95 and potentially 104.98.
