Should we wait and see if the Canadian dollar has room to recover as resistance builds?

Should we wait and see if the Canadian dollar has room to recover as resistance builds?

22.05.2025

In yesterday’s U.S. trading session, the Canadian dollar fell against the yen. The CAD/JPY pair dropped from 104.002 to 103.353. Price action was observed fluctuating around the 20-period moving average (MA) on the hourly chart. On the 4-hour chart, price action has stalled as the 200-period exponential moving average (EMA) acts as resistance, and on the daily chart, the pair is already trading below the 20-period MA, indicating significant resistance at higher levels.I will wait and see whether the Canadian dollar continues to weaken during today’s U.S. trading session.

Among European currencies, the pound weakened the most after the U.S. dollar. GBP/JPY fell from 193.468 to 192.576. The decline followed the 20-period moving average on the hourly chart.On the 4-hour chart, candlesticks have fallen from the +2σ to the -3σ levels of the Bollinger Bands, while on the daily chart, the pair is currently searching for direction just below the zone where short- and long-term moving averages converge. We will closely monitor the direction to see if the pound continues to weaken against the yen.

Today’s schedule includes remarks by Bank of Japan Board Member Noguchi at 10:30, Japan’s machine tool orders at 15:00, remarks by BOE Deputy Governor Breeden at 16:15, Germany’s manufacturing and non-manufacturing PMIs at 16:30, the Eurozone’s manufacturing and non-manufacturing PMIs and Germany’s IFO Business Climate Index at 17:00, and the UK’s manufacturing andNon-Manufacturing PMI; at 20:30, the release of the minutes from the ECB Governing Council meeting; at 21:30, Canada’s Industrial Product Prices and U.S. Initial Jobless Claims; at 22:45, U.S. Manufacturing/Non-Manufacturing PMI; and at 23:00, U.S. Existing Home Sales. We intend to cautiously monitor the Canadian dollar’s potential for recovery as it faces resistance on the upside.

Past Market Reports

1. 17.04.2026New

   Will the market wait and see how much further the U.S. dollar can rise against the yen?

2. 16.04.2026New

   Will the weakening Swiss franc recover? Attention is turning to price movements during European trading hours.

3. 15.04.2026New

   Market participants are likely keeping a close eye on the upside potential of the euro, which has risen against the U.S. dollar

4. 14.04.2026New

   Should we keep an eye on remarks by key figures in the U.S. and try to gauge the direction of currency strength?

5. 13.04.2026New

   Market participants are likely watching for signs of a rebound in the Canadian dollar, which fell against the U.S. dollar following the release of employment figures

6. 10.04.2026

   Will the weakening Swiss franc continue to strengthen against the yen, or should we wait and see?

7. 09.04.2026

   Will the U.S. dollar, which has fallen against the yen, continue its downward slide, or should we wait and see how the market moves?

8. 08.04.2026

   Should we keep an eye on the upside for European currencies that have risen against the U.S. dollar?

9. 07.04.2026

   Market participants may be wary of further downside potential for the U.S. dollar, which has weakened amid concerns over the situation in Iran

10. 06.04.2026

    Investors should be wary of sudden spikes in volatility while major markets are closed