Hello traders! Not so long ago I’ve shared analysis on CAD/JPY pair. It was a long term forecast where downtrend is still dominating. You can read it here. This time we will try to see what kind of price action should be expected in the short term, before the potential drop.
Below is the 1-hour CAD/JPY chart. What we can see is a clean bounce off the 61.8% Fibonacci retracement level, after which price already produce a strong bull candle. This could push price higher, toward one of the next Fibonacci levels.
In particular, there are two key resistances to watch, both of which are confirmed by 2 Fibonacci retracement levels. The first resistance is 76.19, the second is 76.52 which is also confirmed by the upper trendline of the extended descending channel. Although price could also move towards either 76.4% at 76.73 or 88.6% at 76.90. The final resistance is very close to the 77.00 psychological level, and if it will be reached and rejected, perhaps the best risk/reward selling opportunity will be offered for the long term sellers.
On the other hand, while the long term trend remains bearish, CAD/JPY might not correct up that strongly. And if 75.65 support will be broken, the downtrend is likely to continue.
Bias: Long Term bearish while below 77.00. Short term bullish while above 75.65.
Potential Support Zone: 75.65 area
Potential Targets: 76.52
Have a profitable trading!