Traders often overlook CADJPY, as those who want Japanese yen exposure usually opt for USDJPY.
The same goes for Canadian dollar exposure, where USDCAD is the preferred choice.
But every once in a while, CADJPY offers technicals others can’t match, and this is one such time.
The price action from early 2020 points to an intermediate uptrend but a short-term downtrend beginning in November 2022.
The ascending trend line from 2020 combined with the October 2021 high makes 93.00 a confluence of support.
We’ll see if CADJPY dips that low in the coming weeks. But if so, I’d expect significant demand in the 93.00 region.
Even better than 93.00 support is the falling wedge that has developed on the daily chart below.
You can see in the chart below how CADJPY continues to form lower highs and lows, but the two trend lines below come to a point, or apex, in February.
This type of structure typically points to a bullish reversal.
However, it’s imperative to wait for a close above resistance first.
Keep in mind that there’s no guarantee we’ll see CADJPY move as low as 93.00 support.
If the pair closes above the December 15th trend line first, that could trigger a bullish reversal toward 99.60.
Until then, I’ll anticipate a continuation of this falling wedge into 93.00 support.
Lastly, we have US GDP data on Thursday at 8:30 am EST, so expect volatility across the Forex market at that time.