CADJPY appears to be done with its slide, as the forex pair failed in its last two attempts to break below the 106.00 major psychological support. Price is now testing the neckline resistance at 107.00.

A break above this ceiling could set off a climb that’s the same height as the chart formation or roughly 100 pips. The 100 SMA is below the 200 SMA for now, but the gap has narrowed enough to hint at a likely bullish crossover that could attract more buyers.

Stochastic is heading down to show that sellers are in control, but the oscillator is dipping close to the oversold region to signal potential exhaustion and a return in bullish pressure as soon as it turns back up.

RSI is on middle ground and has more room to slide before reaching the oversold area, but the oscillator looks ready to bottom out and turn higher again. If resistance still holds, CADJPY could revisit the lows or create new ones.

CADJPY is likely to take cues from the upcoming BOC decision, as the central bank is widely expected to cut interest rates and signal scope for further easing. A dovish cut hinting at more reductions in 2025 could keep the Loonie on the back foot while JPY could take cues from market sentiment.

However, suggesting that they are considering pausing their rate cuts could bring a relief rally for the Canadian dollar, especially since there have been some improvements in data.

Crude oil prices could also push the correlated Loonie around, as further conflict in Syria could continue to ramp up global supply concerns and the energy commodity’s price. The EIA report could influence crude oil price action as well, as a larger draw in stockpiles could lift the oil-related CAD while a surprise build could bring downside.