Loading...
by Charalambos Pissouros

CAD/JPY Collapses Below an Upside Support Line

CAD/JPY fell off the cliff yesterday after US President Trump threatened to impose fresh tariffs to the remaining Chinese products imported to the US. The tumble brought the rate well below the prior upside support line drawn from the low June 3rd, and although it bounced somewhat from near 81.07, it came back under renewed selling interest today, with the bears overcoming that temporary support.

In our view, the bears could stay in charge for a while more and perhaps push the battle towards the 80.56 barrier, which is marked by the low of June 18th. The bears may decide to take a break near that zone, thereby allowing the rate to rebound somewhat. However, as long as such a potential recovery remains below 81.07, we would still see decent chances for another leg lower. If the second leg bypasses the 80.56 support zone, then we may see the fall extending towards the 80.20 level, marked by the low of June 4th, or the psychological round figure of 80.00, which is near the low of the previous day.

Taking a look at our short-term oscillators, we see that the RSI, already within its below-30 zone, hit the 30 line from underneath and turned down again. The MACD lies well below both its zero and trigger lines, also pointing south. Both indicators detect strong downside speed and support the notion for some further declines in CAD/JPY.

On the upside, we would like to see a break above 81.40 before we start examining the likelihood of a decent recovery in the latest tumble. Such a break may allow bullish waves, perhaps towards the inside swing low of July 3rd, at around 82.00, or the 82.15 territory, which provided decent support on July 22nd and 23rd.

CAD/JPY 4-hour chart technical analysis

Disclaimer:

The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. The Group of Companies of JFD, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyses and must therefore be viewed by the reader as marketing information. JFD prohibits the duplication or publication without explicit approval.

75% of the retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. Please read the full Risk Disclosure.

Copyright 2019 JFD Group Ltd

WEEKLY FINANCIAL NEWSLETTER
RIGHT INTO YOUR MAILBOX!
SUBSCRIBE TO JFD'S STRATEGIC REPORT