CAD/JPY Wobbles: Trump's Tariffs and Bearish Signals Weigh Heavy

CAD/JPY lost its shine on the weak Canadian dollar. It hit a low of 103.18 and is currently trading around 104.11.

Canada Braces for Economic Fallout

President Trump's upcoming 25% tariff on almost all Canadian goods, applicable from March 4, 2025, threatens to throw trade into turmoil and add costs to Canadian exporters, potentially transferring increases to customers. Key sectors like agriculture and manufacturing, heavily reliant on U.S. exports, are severely at risk. A further element of economic concern is introduced by a 10% tariff on Canadian energy exports.

Canada has committed tough action in case the tariffs persist, threatening the possibility of a trade war harming both economies. While diplomatic channels are open to avoid the tariffs, the threat of counter-measures and higher trade tensions hangs over the economic future of the two countries

Markets eye Canadian GDP data today for further direction.

Technical Analysis

CAD/JPY is currently trading below the 34- and 55-EMA on the 4-hour chart. The immediate resistance is at 105.05; a breach above this level could shift targets to 106/107.40/108/108.35/109.30/110. On the lower side, near-term support is at 103 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  105 with a stop-loss set around 106. 10 and a target price of 101.60.