CAD/JPY showed a nice pullback after upbeat Canadian GDP data. It hit an intraday high of 105.02 and is currently trading around 104.779.
With annualized growth of 2.2% in Q1 2025, Canada's actual GDP outperformed estimates mostly driven by a rise in exports resulting from predicted US taxes and higher business investment. Still, the study pointed out basic flaws including a drop in household consumption, flat domestic demand, and increased imports causing inventory accumulation. This GDP data is the final major economic measure before the Bank of Canada's impending rate decision, when markets had already mostly predicted the central bank holding its policy rate at 2.75%.
Technical Analysis
CAD/JPY is currently trading above the 34- and 55-EMA on the 1-hour chart. The immediate resistance is at 105.20; a breach above this level could shift targets to 105.51/106/107/108.25. On the lower side, near-term support is at 104.40 and a break below this support could lead to declines toward 103.85/103/102.50/10.65/101/100.
Indicator Trends
CCI (50)- Bearish
ADX (14)- Bearish
Trading Strategy Recommendation
It is good to buy on dips around 104 with a stop-loss at 103 and a target price of 106.95.
