Hello traders! CAD/JPY upside move seems to be exhausted itself, potentially completing an ABC correction. Pair broke above the downtrend trendline, although it has rejected the 200 Exponential Moving Averages. At first, there was a spike above, but then price cleanly bounced off the EMA.
After the bounce, prie went down quite sharply and broke below the 38.2% Fibonacci support at 76.95. Now this level became the resistance with no 8H closing price above. It means that as long as this resistance is being respected, CAD/JPY should be expected to move down. We can also see that previously, this resistance was rejected for 3 consecutive times, making it a very important level, for buyers and for sellers.
In regards to the downside target, 76.4% Fibs at 75.72 could be the nearest support to watch. This level corresponds to the previous level of support and could be considered as a first profit taking zone by the sellers. At the same time, it could be best to wait until price breaks below the uptrend trendline, to confirm bearish sentiment. It is important that the price won’t break above the 76.95 resistance prior to the trendline break.
Bias: Strongly bearish while below 0.7782
Potential Resistance Zone: 77.00 – 77.20
Potential Targets: 75.72
Have a profitable trading!