CAD/JPY lost its shine after dismal Canadian retail sales. It hit a low of 110.75 at the time of writing and is currently trading around 110.79.
With a sharp 2.9% drop in motor vehicle and parts sales (including a 3.6% fall in new car sales) and a 2.0% decrease in construction supplies driving the drop, Canada's September 2025 retail sales dropped 0.7% month-on-month to CAD 69.8 billion (around USD 49.5 billion), exactly matching expectations and reversing August's 1% rise. Although six of nine subsectors showed losses accounting for two-thirds of all retail volume, food and beverage stores grew 0.8% and core retail sales (ex-autos, gas, and parts) stayed flat, indicating underlying consumer spending remained level outside cyclical categories. Preliminary data suggest somewhat steady retail sales in October, emphasizing a cautious Canadian consumer entering Q4 with notably lower big-ticket and home-improvement spending.
Technical Analysis
CAD/JPY is currently trading below the 34- and 55-EMA and above 200 EMA and 365 EMA on the 4-hour chart. The immediate resistance is at 111.50; a breach above that level could shift targets to 111.80/112.10/113/114/114.69. On the lower side, near-term support is at 110.50, and a break below this support could lead to declines toward 110/109.50/109.
Indicator Trends
CCI (50)- Bearish
ADX (14)- Bearish
Trading Strategy Recommendation
It is good to sell on rallies around 111.18-20 with a stop-loss at 112.28 for a target price of 109.
