CAD/JPY traded higher on Tuesday, after it hit support near the 81.62 level on Monday, and at the time of writing it is pushing through yesterday’s high of 81.95. The pair opened the week with a positive gap, above the prior downside resistance line drawn from the high of April 17th, while since June 3rd, it’s been printing higher highs and higher lows above a new short-term upside support line. So, having these technical signs in mind, we will adopt a positive stance with regards to this exchange rate.
If the bulls are strong enough to further distance themselves from the 81.95 barrier, we may see them driving the battle towards the 82.57 key resistance barrier, defined by the highs of May 6th, 7th and 22nd. That zone also acted as a decent support back on April 25th and 30th. That said, if that zone proves no obstacle for the bulls this time around, its break may set the stage towards the peak of May 3rd, at around 82.97, or the high of the day before, near 83.07.
Both our short-term oscillators detect strong upside momentum and corroborate our view for some further near-term advances. The RSI rebounded from near its respective upside support line and just poked its nose above 70, while the MACD, already well in the positive zone, has ticked back above its trigger line.
On the downside, we would like to see a decisive dip below 81.07 before we start examining whether the bears have gained the upper hand, at least in the near-term. Such a dip may initially set the stage for declines towards the low of June 6th, at around 80.52, the break of which may allow extensions towards the low of June 4th, at 80.22, or the psychological round number of 80.00, from which the pair rebounded the previous day.
