Short-term technical outlook on CAD/JPY (Thurs 15 Nov)
- From its 01 Oct 2018 swing high area of 89.20, the CAD/JPY cross pair has failed to make any upside headway after it stalled right below the pull-back resistance of the former ascending trendline support from 09 Nov 2016 swing low area and started to trade lower (see daily chart).
- Right now, the recent decline has led to cross pair to hover just above the 85.37 ascending trendline from 19 Mar 2018 low while the daily RSI oscillator has staged a bearish breakdown below a significant corresponding support at the 50 level. This observation suggests that medium-term downside momentum has resurfaced which indicate a potential presignal of a price breakdown below the 85.37 ascending trendline support from 19 Mar 2018 low (see daily chart).
- The key short-term resistance stands at 86.00 which is defined by the former lower limit of the recent “minor triangle range” bearish breakdown and the descending trendline in place since 09 Nov 2018 high.
- The hourly Stochastic oscillator has not yet reached an extreme oversold level.
- The next near-term support to watch after 85.37 rests at 84.85 which is defined by the 26 Oct 2018 swing low area and a Fibonacci projection cluster.
Key Levels (1 to 3 days)
Intermediate resistance: 85.85
Pivot (key resistance): 86.00
Supports: 85.37 (trigger) & 84.85
Next support: 86.90/87.00
In the short-term (1 to 3 days), the CAD/JPY may see further downside pressure ahead below the 86.00 key short-term pivotal resistance for a push down towards 85.37 and a break below it opens scope for a further potential drop to target the next support at 84.85 in the first step.
However, a clearance above 86.00 invalidates the preferred bearish scenario for a squeeze back up to retest the minor range resistance of 86.90/87.00 in place since 17 Oct 2018.
Charts are from eSignal
StoneX Financial Ltd (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.