CAD/JPY Tactical Strategy: Navigating the 114.75 Pivot Level

The CAD/JPY pair showcased a structured 'levels-first' tape during the January 23rd session, with price action revolving around a central pivot of 114.75. As the market navigates a 130-pip daily range, traders are focusing on execution quality and boundary acceptance rather than chasing speculative narratives.

Technical Landscape and Key Levels

As of the 18:10 UTC update, CAD/JPY is trading at 114.82, down 0.08% from the open. The session has been characterized by respecting technical boundaries, making the following levels critical for the next 24-hour cycle:

• Resistance 2: 115.75
• Resistance 1: 115.50
• Daily Pivot: 114.75
• Support 1: 114.25
• Support 2: 113.75

Session Handover and Liquidity Checkpoints

To successfully trade this structure, monitor the following liquidity windows for confirmation of trend or range regimes:

London Micro-Trends

Watch for the initial rejection or acceptance around the 114.75 pivot at 07:55 London time. By 10:30 London, market behavior typically solidifies; holding a boundary suggests high trend odds, while a snap-back indicates a range-bound environment.

New York Liquidity Surge

The 08:30 New York window usually provides the final confirmation. A genuine shift in market sentiment requires price acceptance across multiple liquidity windows. One session can move price, but two are needed for validation.

Watchlist Setups

1. The Breakout Buy

Wait for an hourly close above the 115.50 resistance. Seek to buy the subsequent pullback with a stop-loss placed below the 114.75 pivot, targeting a move toward 115.75. Retest quality is more important than breakout speed.

2. The Resistance Fade

Look for a failure at 115.50 followed by a reclaim below the 114.75 pivot. This setup signals a move toward 114.25. Use a stop-loss above 115.50 to manage risk effectively.

Implementation and Risk Management

In the current regime, the first break should be treated as a signal and the retest as the actual trade entry. If the market breaks out but immediately snaps back into the range, it should be treated as a trap signal—favoring mean reversion toward the pivot.

Traders should cross-check CAD/JPY moves against its usual clusters, such as the high-beta FX complex. Divergence between the pair and its correlated peers often resolves through mean reversion rather than trend continuation.

Related Reading:

• CAD/JPY Analysis: Rate-Differential Flow Tests 115.28 Resistance
• AUD/JPY Market Analysis: BoJ-Sensitive Pricing Tests 108.76