CADJPY is moving sideways on its 4-hour chart, finding support around 85.00 and resistance at 88.00. Price just bounced off the top of the range and might be due for a move back to the bottom.

The 100 SMA is below the 200 SMA to confirm that the path of least resistance is to the downside or that resistance is more likely to hold than to break. However, the pair is trading above both moving averages, so these could hold as dynamic support around 87.00.

Stochastic is heading lower to show that sellers have the upper hand, but the oscillator is dipping into the oversold region to signal exhaustion. Turning back up would mean that buyers are returning. RSI has more room to head south, so sellers could stay in control for much longer.

Economic data from Japan turned out mostly stronger than expected today, with the Tankan manufacturing and non-manufacturing figures both beating estimates. Consumer confidence also got a boost, as the index advanced from 36.7 to 37.8 versus the consensus at 37.4.

Meanwhile, Canada has its monthly GDP reading up for release, and a 0.2% contraction is eyed. This comes after a small expansion of 0.7% in the previous month. An even larger than expected reduction in economic growth could mean more downside for the Canadian currency.

Risk aversion seems to be in play as well, after Chinese property developer Evergrande failed to pay its debt payments and kept investors on edge. The company already missed two deadlines to pay 180 million USD worth of interest to foreign debtors, which could have repercussions on the global economy.

With that, traders might be keen on putting funds in safe-haven holdings like the US dollar and the lower-yielding yen while dumping higher-yielding assets like commodity currencies. The Chinese central bank has promised to protect homebuyers’ interests but did not assure that it would bail out the company.