The Canadian dollar dropped against the Japanese yen on Tuesday, as we see oil continue to struggle, with the so-called “peace dividend” driving a lot of price action in various markets.
CAD/JPY
The Canadian dollar dropped against the Japanese yen during early trading on Tuesday as traders continue to watch the Canadian economy with a bit of hesitation. After all, the Canadian economy is slipping a bit, and if there are concerns about crude oil, that also works against the value of the Canadian dollar against most currencies.
The Japanese yen is a safety currency, but ultimately, I think this is an environment where the markets are more or less trying to figure out whether or not the 200-day EMA offers support. It does tend to be a magnet for price, and if we can bounce from there, that would be a very good sign. If we were to break down below the 200-day EMA, then it's possible that we could go looking to the 112-yen level, which is an area of significant support as well.
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Analyzing the Long-Term Technical Structure
I do believe eventually we will get some type of turnaround. I don't think that we are suddenly going to enter a very negative trend, and when you look at the longer-term action in this pair, it has been going reliably bullish since the beginning of 2025. This trend continues to see a lot of momentum to the upside in general until recently.
The market being between the 200-day EMA and the 50-day EMA indicators will more likely than not dictate that we remain choppy, but for now at least, it looks like there's a little bit more bearish pressure. These have not been huge moves, but I think ultimately, we will get a nice buying opportunity if we simply wait for the right-hand side of the V to form.
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