Hello traders! CAD/JPY recently produced a high at 81.46, where RSI formed a bearish divergence on the hourly timeframe. Then the price went down and broke below the 50 Exponential Moving Average, suggesting further price weakness.
As long as the daily closing price remains below the 81.46 resistance, the price will continue to correct down, potentially testing 80.43 support. This support level is confirmed by two Fibonacci retracements, 50% and 88.6% as per the chart below. The downside target also corresponds to the lower trendline of the ascending channel and if reached, could be the starting point of a long term uptrend continuation.
In regards to the upside potential, currently, it has a slightly lower probability in relation to the correctional move down, but this is only if bears will be able to defend 81.46.
Bias: Slightly bearish while below 81.46
Potential resistance Zone: 81.20 – 81.40
Potential Targets: 0.8044
Have a profitable trading!