Hello traders! The long-term CAD/JPY trend remains very bearish although the September 22 price has been consolidating and has formed a triangle pattern. While range-trading, CAD/JPY rejected the 200 Simple Moving Average at 79.09 and then rejected the 61.8% Fibonacci retracement level at 78.97.
Clearly, the 79.00 area remains a strong resistance and today’s price broke below the triangle pattern. Therefore, as long as the daily closing price remains below the 79.10, CAD/JPY will continue to trend down, with the potential downside target at 77.80. This support level is confirmed by 261.8% Fibs applied to the last corrective wave up where the triangle was last rejected. The overall expected move equals to the previously produced wave down and corresponds to 261.8% Fibs.
This opens the potential price drop for another 100 pips, which might occur within a short period of time. This is because the consolidation seems to have ended and it is time for a strong trend.
Bias: Strongly bearish while below 79.10
Potential Resistance Zone: 79.00 – 78.80
Potential Targets: 77.80
Have a profitable trading!