Hello traders! Today we’ll observer the CAD/JPY currency pair, where consolidation phase seems to continue. This is because price has produced a double bottom near 79.00 psychological support and prior to that failed to produce a new higher high.
Today pair has rejected the 200 Exponential Moving Averages, and this could have been the trigger for short term buyers. And as long as price remains above today’s’ low at 78.94, CAD/JPY will move higher.
There is only one key resistance which is located at 79.36. It is confirmed by two Fibonacci retracement levels, 88.6% and 61.8%, booth indicators were applied to the last wave up and the last wave down. Besides, the upside target also corresponds to the middle trendline of the ascending channel, which shows taht the resistance could be reached within just a 24-hour period. If 79.37 resistance will be broke, perhaps CAD/JPY will be heading towards previously established high at 79.70.
On the downside, an hourly break and close below the 78.94 will invalidate bullish wave expectation and pair could be starting to move lower, resulting in a potential trend reversal.
Bias: Bullish while above 78.94
Potential Support Zone: 78.95 – 79.05
Potential Targets: 79.37
Have a profitable trading!