CAD/JPY is back at a key support zone that may make or break its 300-pip consolidation.
Will we get a breakout in the next few sessions?
Let’s take a closer look at the 4-hour chart:
CAD/JPY 4-hour Forex Chart Faster with TradingView
A slide in crude oil prices and brief worries about U.S. participation in the USMCA trade deal kept the Canadian dollar on the defensive last week.
The Japanese yen, meanwhile, drew support from yen-tervention threats and a softer U.S. dollar as safe-haven demand picked up.
Will the tides turn for the Loonie and the yen this week with Canada’s CPI release and U.S. traders returning from holiday?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the Canadian dollar and the Japanese yen, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
CAD/JPY, which has been trading in an observable range since December, is back at the 112.00 psychological level that marks the pattern’s support zone.
Watch for strong bearish candles and sustained trading below 112.00, which could attract fresh selling pressure and pull CAD/JPY toward lower inflection points such as the S1 at 110.80 or the S2 support zone at 109.51.
If Loonie bulls step in and defend the 112.00 area again, we could see a bounce that lifts CAD/JPY toward the 113.50 mid-range level, if not back to the 115.00 range resistance zone.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
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