CADJPY is consolidating inside a symmetrical triangle with its higher lows and lower highs. The pair is already testing the triangle resistance, perhaps considering a bounce or a break.

A bounce could take CADJPY back down to the triangle support near the 100.50 minor psychological mark and dynamic support at the moving averages. The 100 SMA is above the 200 SMA to suggest that bullish pressure is in play but the narrowing gap hints that buyers are weakening.

Stochastic is on the move down but starting to pull up, suggesting that a break higher is possible. A move past the 101.00 major psychological barrier might be enough to confirm a bullish breakout, which could be followed by an uptrend of the same height as the triangle.

RSI is also starting to pull higher without reaching the oversold area, which means that buyers are eager to return.

CADJPY could take cues from the Canadian CPI release later today, as a strong pickup in inflationary pressures could bolster BOC rate hike hopes. Recall that the central bank already paused from tightening but has kept the door open for another increase in interest rates if needed.

However, analysts are expecting subdued price pressures based on other measures of inflation, such as the trimmed CPI and common CPI. The headline reading is slated to show another 0.5% uptick in price levels.

Weaker than expected data could confirm that the BOC is likely to sit on its hands again in its next policy decision, possibly leading to losses for the Loonie and a triangle breakdown for CADJPY.

Apart from that, risk-off flows stemming from fresh uncertainties due to the U.S. debt ceiling issue might keep a lid on higher-yielding currencies’ rallies and favor safe-havens like the yen instead.