Throughout October 9-21, CAD/JPY has rejected the downtrend trendline twice. At the same time pair bounced off an extremely important resistance level at 80.58, which is confirmed by 61.8% and 88.6% Fibonacci retracement level. This might suggest that as long as 80.58 resistance holds, the selling pressure is likely to increase further.
A few days ago, the price also rejected 61.8% Fibs at 79.90, after which a new lower low has been printed. Thus, the lower lows and lower highs pattern is in place, validating the downtrend. Considering that the daily close was below the previously established low at 79.40 area, the probability of the downtrend remains highly favorable, although this resistance must be watched closely for the break above.
The key support is located at 78.00 psychological level, which is confirmed by 38.2% Fibonacci retracement. At the same time, it corresponds to the uptrend trendline as well as the bottom of the descending channel. All-in-all, a 130 pip fast downside move should be expected, but only as long as the price remains below the 79.90 and, most importantly, below the 80.58 resistance. Because if there will be a daily close above the nearest resistance at 79.90, the probability of the downtrend will decrease, and the re-test of the 80.00 area can take place. On the upside potential, only daily break and close above 80.60 will completely invalidate the bearish forecast and the trend is likely to turn bullish.
Key support levels: 78.00
Key resistance levels: 79.90, 80.58
Thanks for your support! If you liked this analysis, please support our profile with a 👍 and follow us to get a new daily analysis.
Disclaimer: The analysis presented in this article is for educational purposes only and should not be considered as financial advice.
A few days ago, the price also rejected 61.8% Fibs at 79.90, after which a new lower low has been printed. Thus, the lower lows and lower highs pattern is in place, validating the downtrend. Considering that the daily close was below the previously established low at 79.40 area, the probability of the downtrend remains highly favorable, although this resistance must be watched closely for the break above.
The key support is located at 78.00 psychological level, which is confirmed by 38.2% Fibonacci retracement. At the same time, it corresponds to the uptrend trendline as well as the bottom of the descending channel. All-in-all, a 130 pip fast downside move should be expected, but only as long as the price remains below the 79.90 and, most importantly, below the 80.58 resistance. Because if there will be a daily close above the nearest resistance at 79.90, the probability of the downtrend will decrease, and the re-test of the 80.00 area can take place. On the upside potential, only daily break and close above 80.60 will completely invalidate the bearish forecast and the trend is likely to turn bullish.
Key support levels: 78.00
Key resistance levels: 79.90, 80.58
Thanks for your support! If you liked this analysis, please support our profile with a 👍 and follow us to get a new daily analysis.
Disclaimer: The analysis presented in this article is for educational purposes only and should not be considered as financial advice.