CADJPY Uptrend Reversal Looms, Canada’s Jobs Report Due Soon

CADJPY appears to have formed a double top chart pattern after failing twice to sustain gains above the 117.00 major psychological area, with both peaks met by aggressive selling pressure.

The neckline of the formation sits around the 114.00 level, and price is currently hovering just above this critical threshold. A decisive break below could confirm the reversal signal and open the door for a more extended decline.

The measured move from the double top formation points to a potential drop toward the 111.00–112.00 area if sellers manage to push through the neckline with conviction.

On the other hand, if buyers manage to defend the 114.00 major psychological floor, the pair could attempt a recovery toward the 115.50–116.00 area before sellers reassert control.

The moving averages are adding weight to the bearish case. The 100 SMA has crossed below the 200 SMA in a bearish crossover, confirming that the path of least resistance is shifting to the downside.

Both indicators are now sitting above price around the 115.50–116.00 zone, reinforcing their role as dynamic resistance on any bounces. The narrowing gap earlier in the formation had already been hinting at fading bullish momentum before the crossover materialized.

Stochastic has tumbled sharply from overbought territory following the second top and is now approaching the oversold region. While the oscillator could trigger a short-term bounce once it reaches exhaustion levels, the broader signal remains bearish unless a meaningful recovery emerges.

RSI has similarly plunged from elevated levels and is now near the oversold boundary, with some room still left to slide before buyers step in. The oscillator’s steep descent reflects the intensity of the recent selloff and suggests that sellers still have the upper hand for now.

Canada’s jobs report could provide direction for the Loonie, as a weak outcome could undermine the Bank of Canada’s neutral stance. Note that yen traders remain wary of intervention, making the yen’s path of least resistance to the upside.