FxWirePro- CADJPY Trade Idea

CAD/JPY pared most of its gains on board-based yen strength. It hit a low of 105.49 and is currently trading around 106.11.

Based on the January Ivey Purchasing Managers Index, economic activity dropped for the first time in five months. It slid to a seasonally adjusted index of 47.1 from 54.7 as recorded in December. This means that it was declining to the business environment since it passed below the mark of 50. The economic activity is explained by slower growth in employment besides rising prices, and the measure of employment had stood at 52.9. The price index hit a high of 64.4 in December 2023. On the whole, the decrease in the PMI signifies the slowing of the economy of Canada.

Technical Analysis

CAD/JPY is currently trading below the 34- and 55-EMA on the 4-hour chart. The immediate resistance is at 106.30; a breach above this level could shift targets to 107/108/108.30/109.30/110. On the lower side, near-term support is at 105.40, and a break below this support could lead to declines toward 104.80/104.

Indicator Trends

 CCI (50)- Bearish

ADX (14)- Bearish

Trading Strategy Recommendation

It is good to sell on rallies around 107 with a stop-loss set around 108 and a target price of 104.90.