CAD/JPY has been in a downtrend for almost a year now, after putting in a high of 89.23 back on October 4th of last year. Will this move continue lower, or will it break out and move higher? Today’s price action pushed higher to 81.83 and tested resistance early in the session, only to reverse and close in the middle of the range near 81.50. Bears have five reasons for the pair to continue to move lower on a daily timeframe:
- The 200-Day Moving Average comes in slightly above the day’s highs at 82.08
- The downward sloping trendline crosses just above near 82.04
- The daily candlestick is an inverted hammer, which indicates price can move lower
- Price today could not take out the psychological 82.00 level. CAD/JPY crossed above 82.00 twice earlier in the month on September 11th and September 12th, only to close both days underneath.
- 82.03 is the 38.2% retracement level from the October 2018 highs to the January 3 spike low, and the pair has yet to close above it.
First horizontal support comes in at 80.25. Below that, the recent lows could be tested from August 26th at 78.50. If that level breaks, the lows from the spike down on January 3rd come into play at 77.50.
As long as CAD/JPY remains below 82.10, bears appear to be in control.