CAD/JPY has been trading in a trendless mode since August 5th, with the 79.30 and 80.50 barriers containing most of the price action. We had some violent spikes out of those bounds, but the pair was quick to return back in between them. Thus, as long as the rate is trading within the range defined by those two hurdles, we will hold a flat stance.
At the time of writing, CAD/JPY is flirting with the lower bound, where a break could signal that the bears are back in the driver’s seat, and could allow declines towards the 78.50 zone, marked by the low of August 25th. If that level is not able to halt the slide this time around, its break may see scope for extensions towards the 78.20 territory, defined by the low of January 3rd.
Shifting attention to our short-term oscillators, we see that the RSI lies below 50 and points down. It looks to be heading towards 30. The MACD stands slightly below both its zero and trigger lines, pointing down as well. Both indicators detect negative momentum and enhance the case for a rate-drop below 79.30.
On the upside, we would like to see a strong break above 80.50, the aforementioned range’s upper end, before we start examining whether control was passed to the bulls. Such a move could initially set the stage for the 81.00 area, near the peak of August 13th, the break of which may extend the recovery towards the 81.40 level, which is marked as a resistance by an intraday swing high formed on August 1st.
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.