CADJPY Chart Rolling Over
CADJPY remains stuck in a longer-term downtrend that leaves it vulnerable whenever the chart starts to tilt to the downside. The high last month came at a trend-line running down off the March high, this was met with a series of rejection candles. Again, a turn lower developing off the trend-line in the form of a lower high.
However, there was still a positive tone off the June low in place with a bottom-side parallel keeping CADJPY supported within an upward channel. After yesterday’s turnabout we are seeing the channel line come under fire in today’s session. A break after respecting significantly increases odds that another leg lower will develop soon.
Furthering along the case for shorts is the bear-flag/channel forming on the 4-hr time-frame. It is currently testing the under-side parallel. A break of the parallel and low at 8213 will open up a path towards lower levels. The lower parallel off the July high will need to be monitored, but a breach through there will likely steepen the sell-off.
Overall, the chart is leaning lower and if recent support breaks it may be time to prime up for another leg towards long-term support via a trend-line from late 2016 with stops potentially at just above 81 and 8060. If the recent low at 8213 holds, then so does a bearish bias with an alternative route possibly developing via a descending wedge.
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CADJPY Daily Chart (chart tilting lower)
CADJPY 4-hr Chart (flagging on lower parallel)
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---Written by Paul Robinson, Market Analyst
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.