CAD/JPY Dips on Weak Canadian Retail Sales: Buy at 106.90 for a 109 Target

CAD/JPY pared some of its gains after dismal Canadian retail sales. It hits an intraday low of 107.08 and is currently trading around 107.128.

With decreases in eight of nine subsectors, including Canadian retail sales, which unexpectedly missed expectations of a 1.5% increase by 0.8% month-over-month in July 2025. Based on Statistics Canada's statistics published on September 19, 2025, a 1.2% fall in ex-autos sales driven by reduced discretionary spending amid high interest rates Though a 1.0% rebound in August is indicated by an advance estimate and year-over-year growth slows to 0.5%, the weak performance especially in Contrasting with strong U.S. consumption patterns, Ontario and Quebec, highlights consumer caution and tempers Q3 GDP expectations, reinforces calls for more Bank of Canada rate reductions.

Technical Analysis

CAD/JPY is currently trading above the 34- and 55-EMA on the 1-hour chart. The immediate resistance is at 107.50; a breach above 1the 07.50 level could shift targets to 108/108.75/109/110. On the lower side, near-term support is at 106.70,and a break below this support could lead to declines toward 106/105/104.78/104.50/103.85/103/102.50/10.65/101/100.

Indicator Trends

 CCI (50)- Bullish

ADX (14)-  Neutral

Trading Strategy Recommendation

It is good to buy on dips around 106.85-90 with a stop-loss at 106.20 for a target price of 109.