Loonie on Fire: CAD/JPY Blasts to 111.90 – 113/115 Targets Locked

Loonie on Fire: CAD/JPY Blasts to 111.90 – 113/115 Targets Locked

CAD/JPY gained sharply on board-based Canadian dollar buying. It hits a high of 111.90 at the time of writing and is currently trading around 111.889.

With a strong 0.6% QoQ growth (2.6% annualized), Canada's Q3 GDP exceeded predictions driven by rising exports, government expenditure, and a recovery in goods-producing sectors that offset weaker services and kept recession fears at bay, while September's flat 0.2% MoM matched expectations after August's -0.3% drop. An early October flash projection, however, already indicates a severe -0.3% MoM decrease dragged downward by oil & gas, manufacturing, and education, therefore highlighting new Q4 risks from U.S. tariff threats and falling momentum. Per-capita GDP decreased for the sixth consecutive quarter notwithstanding the headline beat as quick population growth keeps running faster than economic production, therefore giving the Bank of Canada much to chew on ahead of its next interest rate decision.

Technical Analysis

CAD/JPY is currently trading above  the 34- and 55-EMA  and above 200 EMA and 365 EMA on the 4-hour chart. The immediate resistance is at 112; a breach above that level could shift targets to 113/114/114.69. On the lower side, near-term support is at 111.20,and a break below this support could lead to declines toward 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 111.48-50 with a stop-loss at 110.80 for a target price of 113/115.