CADJPY continues to trade within a well-defined descending channel, with price currently sitting at 114.68 after a sharp leg lower that pierced below the channel’s mid-section. The pair is now attempting to stabilize, but the broader structure remains firmly bearish as long as the channel holds.

The recent selloff dragged price all the way down toward the swing low at 114.36, which marks the swing low and the nearest floor to watch. A bounce from current levels appears to be in the early stages, and the Fibonacci retracement tool highlights where sellers could be waiting to fade any recovery attempt.

The 38.2% Fib sits at 114.75, which is the first hurdle for bulls to clear. Above that, the 50% level at 114.87 lines up closely with the channel top. A deeper retracement could reach the 61.8% Fib at 114.99 before sellers reassert control, while the 100% level at 115.38 represents the swing high and a more distant ceiling.

The 100 SMA has crossed below the 200 SMA, confirming that the path of least resistance remains to the downside. Both moving averages are sloping lower and converging near the upper Fibonacci levels, adding to the overhead resistance stack around the 114.87–115.00 zone.

Stochastic has bounced sharply from the oversold region and is heading higher, suggesting that a corrective bounce has room to develop in the near term. This could fuel the pullback toward the Fib resistance levels mentioned above.

RSI is also turning up from near oversold territory, reinforcing the case for a short-term recovery. However, if either indicator rolls back over before reaching overbought levels, it could signal that sellers are eager to resume the downtrend toward the channel bottom and below 114.36.

CADJPY could take cues from geopolitical headlines as markets are now focused on the prospect of a US-Iran peace deal. If this materializes, crude oil could unwind its war premium and drag the correlated Loonie.