News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
CAD/JPY Forecast: Price May Test the Monthly Support

CAD/JPY Forecast: Price May Test the Monthly Support

Mahmoud Alkudsi, Analyst

Canadian Dollar vs Japanese Yen Technical Forecast

  • Bearish momentum has eased, but the bias lower remained
  • Negative outlook while below 78.68

CAD/JPY- Weaker Bearish Sentiment

Last week, CAD/JPY declined to a near ten-week low of 77.61. However, the price rallied after as some bears seemed to cover. Ultimately, a weekly candlestick closed with a Doji pattern highlighting the market’s indecision.

Alongside that, the Relative Strength Index rose from 39 to 49 signaling that bears were losing momentum.

CAD/JPY Daily PRice CHART (October 1, 2018 – August 3, 2020) Zoomed Out

CADJPY daily price chart 03-08-20. zoomed out

CAD/JPY Daily PRice CHART (June 2 – AUgust 3, 2020) Zoomed In

CADJPY daily price chart 03-08-20 zoomed in

On Friday, CAD/JPY climbed back to the current 78.68 – 80.54 trading zone however, the pair failed to overtake the 50-day moving average indicating that bearish momentum was still intact.

A daily close below the low end of the current trading zone could encourage bears to re-attempt testing the monthly support at 77.25 (December 2011 high).

On the other hand, a failure in closing below the low end of the current zone reflects bear’s hesitation and may trigger a rally towards the high end of the zone (March 2018 low).

CAD/JPY Four Hour PRice CHART (June 10 – AUgust 3, 2020)

CADJPY four hour price chart 03-08-20

On July 27, CAD/JPY traded below the bullish trendline support originating from the May 22 low at 76.61 indicating a shift in favor of bears control which has thus far held.

To conclude, while bearish bias is still in place a break above the aforementioned bullish trend line resistance may end bull’s control. Therefore, a break above 79.66 may cause a rally towards 80.35, while a break below 78.28 could send CADJPY towards 77.25. As such, the support and resistance levels marked on the four-hour price chart should be watched closely.

Written By: Mahmoud Alkudsi,Market analyst

Please feel free to contact me on Twitter: @Malkudsi

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES