CAD/JPY showed a minor sell-off after the BOC rate cut. It hit an intraday low of 102.49 and is currently trading around 102.82.
The U.S.-Canada trade has turned sour into a trade war, with the U.S. imposing a 25% duty on Canadian aluminum steel and other imports that has prompted Canada to impose retaliatory tariffs on approximately $20 billion of American metals, computers, and sporting goods. President Trump's threat of further tariffs has been met by Canada's imposition of further tariffs on $29.8 billion of American goods, which has resulted in trade dislocations and apprehensions of economic slowdown and risk of recession. This skirmish is part of an enhanced global trade war, with the EU also having plans for countermeasures, which risks destabilizing global markets and economies.
Technical Analysis
CAD/JPY is currently trading below the 34- and 55-EMA on the 4-hour chart. The immediate resistance is at 103.20; a breach above this level could shift targets to 103.65/104/104.50/105/106/107.40/108/108.35/109.30/110. On the lower side, near-term support is at 102.30 and a break below this support could lead to declines toward 102/101.50.
Indicator Trends
CCI (50)- Bearish
ADX (14)- Neutral
Trading Strategy Recommendation
It is good to sell on rallies around 103.25-30 with a stop-loss set around 104 and a target price of 101.60.
