On February 25th I pointed out the 84.50 resistance area on CADJPY.
It’s a level that has influenced the pair since last December. You may recall the December 18th breakdown that was good for 650 pips.
My suspicion came to fruition last Friday.
CADJPY not only tested the 84.50 region as new resistance, but it also carved a bearish rejection candle as a result.
The pair went on to lose more ground on Monday. However, buyers did their part to keep the decline as orderly as possible.
But that didn’t stop sellers from breaking a short-term trend line.
I pointed this out to Daily Price Action members earlier in Monday’s session. As you can see from the 4-hour chart below, CADJPY is now well below this level.
As we know, old support becomes new resistance.
With that in mind, any retest of this 84.20/30 area will likely attract an influx of selling pressure.
Key support comes in at 82.30 followed by 80.55.
Keep in mind that we have a Bank of Canada rate decision and statement this Wednesday the 6th at 10 am EST.
Those events will no doubt shake things up for the CADJPY.
While not quite as market moving, Canada also reports on their employment situation this Friday the 8th at 8:30 am EST.
It would be wise to keep an eye on all of these events if you decide to trade CADJPY.
From a purely technical perspective though, the pair will remain under pressure while below new resistance at 84.20/30 on a 4-hour closing basis.
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IMPORTANT: I use New York close charts so that each day closes at 5 pm EST.
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