CADJPY is consolidating inside a symmetrical triangle with its higher lows and lower highs. Price is bouncing off support and might be due for another test of the resistance near the 100.00 major psychological level.

This also lines up with the 200 SMA dynamic inflection point, which adds to its strength as a ceiling. The 100 SMA is below the 200 SMA to confirm that the path of least resistance is to the downside.

Stochastic is pointing down, also indicating that selling pressure is in play. However, the oscillator is approaching the oversold region to signal exhaustion among sellers.

Meanwhile, RSI is on the move up to reflect bullish momentum and has room to climb before reflecting overbought conditions.

A break above the triangle top could send CADJPY higher by the same height as the chart formation, which is around 400 pips. Similarly a break below support around 98.50 could set off a downtrend that’s the same size.

CADJPY could take its cues from the Canadian retail sales report due later today. Analysts expect to see stronger headline consumer spending of 1.5% versus the earlier 0.1% uptick. The core retail sales figure could tick higher from 2.1% to 2.2%.

The Canadian dollar might also take directions from crude oil prices, as the commodity is also stuck in tight consolidation. Traders appear to be waiting for more certainty on the European embargo on Russian fuel, as this might drive crude oil prices higher on supply crunch fears.

On the other hand, further delays and the possibility of foregoing an embargo might mean downside for the commodity.

Meanwhile, there are no major reports due from Japan, but the safe-haven yen continues to draw support from risk-off flows. Although the BOJ has expressed its desire to keep the Japanese currency weak and intervene if necessary, the lower-yielding yen could still benefit from risk aversion.