The last time I discussed CADJPY was back on December 18th of last year.
We were trading a bearish break from an ascending channel that began in 2016. In fact, there were two channels in play at the time.
Within nine trading days, CADJPY fell an additional 650 pips following the retest of the 85.00 resistance area in mid-December.
The January 3rd flash crash delivered nearly half of those losses on its own.
Since that low on the 3rd, CADJPY has managed to claw back nearly 600 pips. Buyers are now approaching levels we discussed on the 18th of last month.
Two days ago, the pair managed to clear the 82.15 resistance level. This was the swing low in June of last year.
You can see how the pair held above 82.15 yesterday and even caught a bid from it earlier in today’s session.
That leaves the 83.80 resistance area exposed for next week.
This area served as support between August and December of last year. As such, it will likely attract sellers on a retest as new resistance.
However, sellers need to be careful here.
Many of the yen pairs are gaining ground as the S&P 500 is once again in rally mode.
It’s unclear at the moment whether this latest CADJPY rally is a respite in the downtrend or something more.
As such, waiting for bearish price action such as a pin bar from 83.80 next week wouldn’t be a bad idea.