Chart of the day - CAD/JPY may see further upside in short term

Further potential push up for CAD/JPY above 85.80 key short-term support.

Short-term technical outlook on CAD/JPY (Fri, 18 May)



Key technical elements

  • Since its 19 Mar 2018 low of 80.54, the CAD/JPY has started to evolve into a medium-term ascending channel with its upper limit/resistance at 87.90 and lower limit at 84.50/20 (see daily chart).
  • The daily RSI oscillator has staged a bullish breakout from its former corresponding descending resistance and still has room to manoeuvre to the upside before it reaches an extreme overbought level of 86%. These observations suggest that medium-term upside momentum of price action has resurfaced.
  • The key short-term support rests at 85.80 which is defined by the minor ascending channel support from 08 May 2018 low and the former medium-term range resistance from 13 Apr/03 May 2018.

Key Levels (1 to 3 days)

Intermediate support: 86.15

Pivot (key support): 85.80

Resistances: 87.10 & 87.90/88.00

Next support: 84.50/20

Conclusion

Therefore as long as the 85.80 short-term pivotal support holds, the CAD/JPY is likely to continue its up move to target the intermediate resistance at 87.10 before the medium-term resistance of 87.90/88.00 (medium-term ascending channel resistance from 19 Mar, pull-back resistance of former major ascending trendline support from 09 Nov 2016 & Fibonacci projection cluster).

However, failure to hold at 85.80 shall negate the bullish tone for a deeper pull-back towards the medium-term support at 84.50/20.

Charts are from eSignal


Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.