Can CAD/JPY avoid deeper losses as long-term trend reverses?

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Highlights

CAD/JPY broke below a long-term ascending trendline from last November, entering the 110.50 to 112.00 support zone.
The breach of a key technical floor points to a structural shift in trend influencing market flows and positioning.
Bearish technical signals dominate, with the pair expected to fluctuate between 110.61 and 111.73 and further downside favored if support fails.

Market positioning shifts as trendline breach intensifies focus on support

According to Fxopen, CAD/JPY broke below its long-term ascending trendline from last November's lows, entering the 110.50–112.00 support zone. This breach of a well-established technical floor could signal a reassessment of market positioning, raising the importance of support levels in guiding upcoming flows. The move indicates participants are responding to structural shifts in trend rather than isolated macro or policy drivers.

Bearish signals persist as rejection at moving averages meets oversold risk

On the hourly chart, CAD/JPY is trading below both the MA-20 at ¥111.46 and the MA-50 at ¥111.42, while on the daily chart it remains well beneath the MA-200 at ¥114.7. The Ichimoku Kijun level at ¥111.49 now serves as immediate resistance for any attempted rebound. Momentum indicators continue to reflect bearish sentiment, with RSI at 39.7, CCI and MACD both on sell signals, and Bull/Bear Power registering negative values. The ADX is neutral, and while the Awesome Oscillator does not confirm a distinct trend, the Stoch RSI shows oversold conditions that could limit further downside pressure in the very near term.

Sideways bias maintained as consolidation persists within tight range

In the short term, CAD/JPY is likely to consolidate within the ¥110.61 to ¥111.73 band, reflecting typical volatility relative to current levels. The baseline scenario is continued sideways movement within this range over the next two to three trading days. Should price break above resistance at ¥111.49, a brief corrective rally may unfold. Conversely, a move below ¥110.61 could trigger further weakness as bearish momentum resumes.

Viktoras Karapetjanc, Traders Union expert, sees the recent breakdown of CAD/JPY’s ascending trendline as a sign of shifting sentiment. He believes technicals now outweigh macro or policy headlines in the immediate outlook. Momentum indicators point to persistent bearishness, though oversold signals suggest limited short-term downside. He expects sideways consolidation, with traders watching for a decisive move out of the current range. "The technical breach changes the near-term playbook, but a clear move above ¥111.49 or below ¥110.61 will be needed to spark the next directional move," says Karapetjanc.

Earlier, analysts noted that persistent bearish momentum dominated CAD/JPY, with the pair navigating below its key moving averages and momentum indicators reflecting sustained seller control. The current technical setup builds on this view by highlighting the recent break below a long-term trendline, making the ¥110.61 support level a critical threshold to watch for renewed downside risk.

Source of Data: CAD Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.