The CADJPY bulls have put up a good fight over the past four weeks but the opposition may be about to win out.
Since late April the pair has spent most of its time digesting gains made from the rally that began on April 1st. During this time the 98.64 level has played a very obvious role as an area of value for buyers.
However price action of late has been putting heavy pressure on the level which begs the question – how much longer can the bulls hold out?
The answer to that question is anyone’s guess. The tipping point on the other hand is as easy to identify as it is to verify. For that we turn to the 98.64 level that has held as support since the pair closed above it on April 28th.
A daily close back below the level would expose channel support and the 96.80 level. Alternatively, a move above the psychological level of 100 would negate the downside potential and push prices higher.
Summary: Wait for a daily close below 98.64 and then watch for a retest as new resistance. A minor level of support can be found at 97.65 with key support coming in at 96.80.