CAD/JPY at risk of minor bounce before new drop as NFP Canada PMI looms

Short-term technical outlook on CAD/JPY



click to enlarge charts

Key Levels (1 to 3 days)

Intermediate resistance: 80.50

Pivot (key resistance): 80.75

Supports: 79.80 & 79.50/30

Next resistance: 81.70/80

Directional Bias (1 to 3 days)

The CAD/JPY is now at risk of a minor corrective rebound to retrace the recent 2-day of steep decline from 81.83 high of 01 Oct 2019 to 79.80 low of 03 Oct 2019 towards the 80.50 intermediate resistance with a maximum limit set at the 807.75 key short-term pivotal resistance before another potential downleg sequence to target the next significant near-term support at 79.50/30.

However, a clearance with an hourly close above 80.75 put the bears on hold for a steeper corrective rebound towards the 81.70/80 key medium-term resistance (also the minor descending channel resistance from 12 Sep 2019 high).

Key elements

  • The CAD/JPY is still evolving within a medium-term downtrend phase since 01 Mar 2019 high of 85.23 within a long-term secular range configuration in place since Apr 1995.
  • The hourly RSI oscillator has shaped a bullish divergence signal after it hit an extreme oversold level and sees has further room to manoeuvre to the upside before its reaches its overbought region. These observations increase the probability of a minor rebound at the 79.80 level.
  • The 87.75 key short-term resistance is defined by the former swing low area of 23/25 Sep 2019 and close to the 50% Fibonacci retracement of steep decline from 01 Oct 2019 high to 03 Oct 2019 low.
  • The 79.50/30 significant near-term support is defined by the minor swing low areas of 28 Aug/03 Sep 2019 and a confluence of the 76.4% Fibonacci retracement of the prior rebound from 26 Aug low to 12 Sep 2019 high and the 1.618 Fibonacci expansion of the decline from 12 Sep high to 23 Sep low projected from 01 Oct 2019 high.

Charts are from eSignal


Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.