CAD/JPY gained momentum as Canadian dollar gained sharply after Trump pause trade tariff. It hit an intraday high of 107.77 and is currently trading around 107.36.
The recent tariffs imposed by President Trump have severely dented the Canadian dollar (CAD) as it declined by over 1.5% compared to the U.S. dollar (USD). He started charging 25% tariffs on most of Canadian goods and 10% on energy exports effective February 4, 2025, which compelled Canada to retaliate with similar tariffs on U.S. goods. Economists argue that these tariffs will decrease Canada's GDP by about 2.5% and increase the unemployment rate. They may result in higher consumer goods prices and more pressure on households. Therefore, the entire situation may result in a recession and more market volatility.
Technical Analysis
CAD/JPY is currently trading below the 34- and 55-EMA on the 4-hour chart. The immediate resistance is at 107.80; a breach above this level could shift targets to 108.30/109.30. On the lower side, near-term support is at 106.75, and a break below this support could lead to declines toward 105.71/105.
Indicator Trends
CCI (50)- Neutral
ADX (14)- Neutral
Trading Strategy Recommendation
It is good to buy on dips around 107 with a stop-loss set around 106 and a target price of 109.20/110.
