CAD/JPY sell prospects amidst a strengthening Japanese yen

CAD/JPY chart and technical analysis

CAD/JPY was in a bullish trend for the last 10 months after the price made a double bottom around the $95.0 demand area. However, the price broke the bullish trendline and turned bearish last week.

The massive drop last week was mainly due to the unexpected announcement of increasing interest rates by the Bank of Japan(BOJ). The is expected to drop further after making some retracement.

I am expecting the price will possibly further drop to the 102.200 support level in the coming days and weeks. Price will possibly retrace to the 108.590 resistance level and bearish order block before the drop. I will enter for a short trade once the price retraces back to the 108.590 resistance level.

CAD/JPY Fundamental analysis

Fundamentally, the price of CADJPY will remain volatile due to high-impact news throughout the week.

The most important news events this week are CPI and interest rate decisions. If the data comes out positive for the US dollar it will probably push the price of CADJPY up and if the data turns out negative the price of CADJPY will drop.

Moreover, the Bank of Japan has vowed to increase interest rates if that happens it will strengthen the Japanese yen and CADJPY will drop significantly.

Canadian dollar to Japanese yen trade idea takeaways

•  The price of  CAD/JPY will possibly drop to the 102.20 support level in the coming days.
• The price will likely retrace to the 108.573 support level before the surge.
• Multiple take-profit levels have been added to secure profit along the way.
• The risk-to-reward ratio on this trade is 1:4.
• The entry and stoploss prices have been placed at secure levels with the least probability of getting hit.
• Good luck!