CADJPY Pulls Back on Weak Canadian Retail Data: Dips to 113 Prime Buying Opportunity Targeting 116

CAD/JPY pared some of its gains after weak Canadian CPI data.  It hits an intraday high of 114.45  and is currently trading around 114.30.

Canada's October retail sales disappointed, with headline figures declining 0.2% month-over-month to C$69.4 billion—missing expectations for flat growth—while the core measure (excluding autos and gasoline) fell 0.5%, marking a second consecutive drop and highlighting weakening underlying consumer demand. The core weakness was largely driven by a 2.0% slump in food and beverage retailers, including a sharp 10.6% plunge in beer, wine, and liquor stores due to labour disruptions in British Columbia, alongside declines in clothing (-0.7%) and health & personal care (-0.3%), partially offset by gains in furniture and electronics (+1.1%). Despite the soft print, Statistics Canada's advance estimate signals a promising 1.2% rebound in November retail sales, suggesting a potential recovery heading into the holiday shopping season.

Technical Analysis

CAD/JPY is currently trading above the 34- and 55-EMA, as well as the 200 EMA and 365 EMA, on the 4-hour chart. The immediate resistance is at 115; a breach above that level could shift targets to 116/116.91. On the lower side, near-term support is at 113.80,and a break below this support could lead to declines toward 113/112/111.69/ 111/110.50/110/109.50/109.

Indicator Trends

 CCI (50)- Bullish

ADX (14)-  Bullish

Trading Strategy Recommendation

It is good to buy on dips around 113.78-80 with a stop-loss at 113 for a target price of 116/116.90.