The CADJPY is in the process of testing a significant resistance area at 84.50.
It’s the former ascending channel support that extends from the 2016 low. I mentioned the level back on December 18th.
That breakdown in mid-December was good for 650 pips.
Here it is again in case you missed it:
Since the January 3rd low, CADJPY has made its way back to the 84.50 region.
And as we know, old support becomes new resistance.
However, there’s no sign that sellers are ready to take back control, at least not yet.
The USDJPY is also catching a slight bid so far today.
The lack of a proper CADJPY sell signal will keep me on the sideline for now. Just like the GBPJPY I mentioned the other day, I don’t want to step in front of buyers.
Keep in mind that the 61.8% Fibonacci retracement from the October 2018 swing high to the year-to-date low comes in at 84.56.
That could be a price to keep an eye on this week.
As long as CADJPY stays below the 84.50 area on a daily closing basis, I will treat this year’s price action as a corrective move back to new resistance.
Key support comes in at the 82.00 handle. However, there are bound to be other minor support levels along the way.
On the flip side, a daily close above 84.50/60 would negate the bearish idea.
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