FxWirePro- CADJPY Daily Outlook

CAD/JPY gained momentum despite weak Canadian CPI. It hit a low of 107.32 and is currently trading around 108.54.

The Consumer Price Index of Canada decreased to 0.4 in December 2024 after having no change in November. It marked a downswing in what had been, up to this point, a trend of inflation. Year-over-year, the CPI rose to 1.8 in December but less than in November at 1.9. The decline was mainly due to lower prices for food at restaurants and drinks, affected by a temporary tax break that started on December 14. Excluding food, the CPI rose 2.1% year-over-year, showing that core inflation remained stable. These changes reflect ongoing adjustments in consumer prices and recent government efforts to lower living costs for Canadians.

Technical Analysis

CAD/JPY is currently trading below the 34- and 55-EMA on the 4-hour chart. The immediate resistance is at 109.20; a breach above this level could shift targets to 109.60/110/110.50/111, 111.56, or 112. On the lower side, near-term support is at 108, and a break below this support could lead to declines toward 107.30/106.

Indicator Trends

 CCI (50)- bearish

ADX (14)- Neutral. Overall, the indicators reveal a mixed trend, suggesting caution in trading decisions.

Trading Strategy Recommendation

It is advisable to buy on dips around 108, with a stop-loss set around 107 and a target price of 112.