CAD/JPY 1H Chart: Two channels prevail
The Canadian Dollar has been weakening against the Japanese Yen in a descending channel since mid-September. This pattern began when the rate bounced off a long-term ascending wedge valid since late December, 2017.
If looking in the short term, the rate has formed a junior channel. However, the Loonie has failed to reach its upper boundary for several sessions, thus demonstrating the strength of bears.
The pair is currently testing the combined resistance of the 100– and 55-hour SMAs at 88.40. In case this area is breached, the rate likewise faces the weekly and monthly PPs and the 200-hour SMA circa 89.00.
The overall market sentiment is bearish; thus, it is likely that the medium-term channel might not hold the rate any longer. A possible downside target for this week could be the monthly S2 and the weekly S1 at 87.00.
If looking in the short term, the rate has formed a junior channel. However, the Loonie has failed to reach its upper boundary for several sessions, thus demonstrating the strength of bears.
The pair is currently testing the combined resistance of the 100– and 55-hour SMAs at 88.40. In case this area is breached, the rate likewise faces the weekly and monthly PPs and the 200-hour SMA circa 89.00.
The overall market sentiment is bearish; thus, it is likely that the medium-term channel might not hold the rate any longer. A possible downside target for this week could be the monthly S2 and the weekly S1 at 87.00.
The Canadian Dollar continues to trade against the Japanese Yen in a dominant channel down pattern. The previous forecast, where a descending channel was mapped turned out to be precise, and the pair has made a rebound.
However, the rebounding pattern is rather hard to map, as there are no clearly visible reversal points. Although, Dukascopy analysts have drawn a speculative channel up pattern on the chart. In the borders of that channel an almost obsolete channel down exists.
Most recently the pair approached the support line of the medium scale pattern, where it is being pressured from the upside by the 100-period SMA.