The CADJPY isn’t something I trade often. But recent price action suggests the pair could be in the early stages of the next leg higher. And with the right amount of patience, the technical structure that’s been forming since mid-February could offer an attractive entry.
The pattern I’m referring to is the descending channel that extends from the February 15th high. Buyers have already tested the upper boundary of the channel twice and seem intent on having a third go at the 83.50 area.
Additionally, the CADJPY bounced from a significant area last week. The 82.00 handle has been a key factor since April of last year and is also the 50% retracement of the 2016 range that spans 1,410 pips between 74.81 and 88.91.
From here I’ll be on the lookout for a daily close above channel resistance near 83.50. If it happens, I’ll then need to see bullish price action on a retest of the area as new support.
The next key resistance would come in at 84.60. The level has served as a pivot since December of last year and is also the 38.2% Fibonacci retracement from the 2016 high to the current 2017 low. A close above 84.60 would expose 85.45 followed by 86.25.
But nothing is confirmed until buyers manage a daily close above channel resistance. Also, keep in mind that we have the Bank of Canada rate decision and statement this Wednesday at 10 am EST.
With this in mind, I’ll wait for the event to pass before considering an entry here.
The pattern I’m referring to is the descending channel that extends from the February 15th high. Buyers have already tested the upper boundary of the channel twice and seem intent on having a third go at the 83.50 area.
Additionally, the CADJPY bounced from a significant area last week. The 82.00 handle has been a key factor since April of last year and is also the 50% retracement of the 2016 range that spans 1,410 pips between 74.81 and 88.91.
From here I’ll be on the lookout for a daily close above channel resistance near 83.50. If it happens, I’ll then need to see bullish price action on a retest of the area as new support.
The next key resistance would come in at 84.60. The level has served as a pivot since December of last year and is also the 38.2% Fibonacci retracement from the 2016 high to the current 2017 low. A close above 84.60 would expose 85.45 followed by 86.25.
But nothing is confirmed until buyers manage a daily close above channel resistance. Also, keep in mind that we have the Bank of Canada rate decision and statement this Wednesday at 10 am EST.
With this in mind, I’ll wait for the event to pass before considering an entry here.