CADJPY trades higher after the BOC monetary policy. It hits an intraday high of 107.99 with current trading around 107.91.
On December 11, 2024, the Bank of Canada (BoC) cut its key interest rate by 0.50 percentage points to 3.25%, marking the fifth rate cut since June 2024. This reduction aims to support economic growth as Canada’s economy grew only 1% in the third quarter, and inflation is at the target level of 2%. However, the BoC is cautious about future cuts and will evaluate changes carefully. The decision comes amid mixed global economic signals, especially with potential U.S. tariffs affecting Canadian exports. The BoC plans to closely monitor economic data to adjust its policies and promote recovery.
Technical Overview: Navigating Market Trends
From a technical perspective, CADJPY is currently trading below the 34- and 55-EMA on the 4-hour chart. The immediate near-term resistance sits at 107.60, and a breach above this level could see targets shift to 108/108.52/108.65, 109, 110, and ultimately 112. Conversely, immediate support is noted at 106.70; a breach below this support could lead to declines toward 106.20, and 104.85.
Market Indicators: A Mixed Trend Signal
Examining the 4-hour chart indicators: the CCI (14) is bullish, while the ADX indicates a neutral position. Overall, the indicators reveal a mixed trend, suggesting caution in trading decisions.
Trading Strategy: Buy on Dips
Considering the analysis above, it may be prudent to buy on dips around 107.38-40 setting a stop loss (SL) around 106, with a take profit (TP) target adjusted to 111.75.
