CAD/JPY 1H Chart: Pair points to weakness
The Canadian Dollar has been trading in a channel up against the Japanese Yen during the past nine months.
After testing the upper boundary mid-September, the Loonie began its way towards the southern side, thus forming a junior channel in the opposing direction. The senior pattern was reached on November 29 and re-tested once again on Tuesday.
As apparent on the chart, the Loonie has strengthened significantly during the past sessions. As a result, it breached a trend-line (in red) and dashed through several significant resistance levels.
There is still some slight upside potential until the 88.60 area. The base scenario, however, favours a subsequent reversal from the junior channel and a period of decline. It is likely that bears prevail until the 55-, 100– and 200-hour SMAs are reached circa 87.80.
After testing the upper boundary mid-September, the Loonie began its way towards the southern side, thus forming a junior channel in the opposing direction. The senior pattern was reached on November 29 and re-tested once again on Tuesday.
As apparent on the chart, the Loonie has strengthened significantly during the past sessions. As a result, it breached a trend-line (in red) and dashed through several significant resistance levels.
There is still some slight upside potential until the 88.60 area. The base scenario, however, favours a subsequent reversal from the junior channel and a period of decline. It is likely that bears prevail until the 55-, 100– and 200-hour SMAs are reached circa 87.80.