CAD/JPY showed a minor sell-off after weak Canadian retail sales. It hits an intraday high of 106.24 and is currently trading around 106.047.
In April 2025, Canadian retail sales experienced a modest 0.3% month-over-month increase, reaching $70.1 billion. This growth was primarily attributed to an uptick in motor vehicle sales, as consumers sought to make purchases ahead of impending US tariffs. Despite this increase, the figure fell short of the 0.5% rise anticipated by market analysts. Furthermore, preliminary data from Statistics Canada indicates a projected 1.1% decline in retail sales for May—the sharpest monthly decrease observed in the past year. This suggests that concerns regarding tariffs and broader economic uncertainty are beginning to weigh on consumer spending. While April’s data reflects some resilience among consumers, the outlook appears increasingly challenging, with significant headwinds likely to affect retail activity in the months ahead.
Technical Analysis
CAD/JPY is currently trading above the 34- and 55-EMA on the 4-hour chart. The immediate resistance is at 106.35; a breach above this level could shift targets to 107/108.25. On the lower side, near-term support is at 105.50,and a break below this support could lead to declines toward 104.78/104.50/103.85/103/102.50/10.65/101/100.
Indicator Trends
CCI (50)- Bullish
ADX (14)- Neutral
Trading Strategy Recommendation
It is good to buy on dips around 105.58-60 with a stop-loss at 104.78 and a target price of 108.
