CAD/JPY pared some of its gains after BOC's monetary policy. It hits an intraday low of 106.22 and is currently trading around 106.30.
On September 17, 2025, the Bank of Canada lowered its overnight rate by 25 basis points to 2.5%, therefore restarting its easing cycle following three straight driven by a shrinking labor market with 7.1% unemployment, holds a 1.6% economic contraction in Q2 as a result of a 27% fall in exports from U.S. tariffs, and pressure on inflation relief with CPI at 1.9%. Governor Tiff Macklem emphasized a prudent approach amid trade uncertainty; markets expect another possible cut by year-end, probably at the October 29 announcement when the new Monetary Policy Report will be published.
Technical Analysis
CAD/JPY is currently trading below the 34- and 55-EMA on the 4-hour chart. The immediate resistance is at 107.20; a breach above 107.20 level could shift targets to 108/108.75/109/110. On the lower side, near-term support is at 106,and a break below this support could lead to declines toward 105/104.78/104.50/103.85/103/102.50/10.65/101/100.
Indicator Trends
CCI (50)- Bearish
ADX (14)- Neutral
Trading Strategy Recommendation
It is good to sell on rallies around 106.48-50 with a stop-loss at 107.20 for a target price of 105/104.70.
