With new lower and higher lows being printed, CAD/JPY is clearly in a downtrend. Throughout the
decline, the price was below 200 Moving Average all the time. Currently 200 Moving
Average is acting as a resistance and now it could be the starting point for
another wave down.
After the breakout of the double bottom near 94.50 (S2), Fibonacci
applied to the 09.07 low and 13.07 high show there is strong resistance at R2
area (96.00) that has been already rejected once and is likely to be rejected
again. The bearish divergence on the DeMarker oscillator confirms bearish sentiment.
Consider selling CAD/JPY today while the rate is near R1 (95.78),
targeting 161.8% Fibs area – S3 (92.87). At this point, only a daily close above
R2 should be able to reverse CAD/JPY to the upside and could be used as an exit
signal of short positions.
Support: 95.47, 94.48, 92.86
Resistance: 95.78, 96.08
The material has been provided by InstaForex Company – www.instaforex.com