- CAD/JPY bulls are moving in but there are downside prospects.
- The day ahead has red news in both Asian and the US.
CAD/JPY is on the watchlist for the rest of the week as the price moves out of an important trendline on both the longer-term and shorter-term charts. The following outlines the scenarios for the rest of the week and next:
CAD/JPY daily chart
Bears are on the prowl on the break of stricture and the price is coiled below it as illustrated above. A breakout could be imminent:
The price has been chipping away at the now-broken trendline. The downside target at the extreme is located near 91.70 while the upside targets are the 99.70s and 101.10s:
Meanwhile, the channel is compelling and the downside is favourable for the nearer term despite being on the backside of the recent bearish trend:
The Daily W-formation sees support near 96.00 within the descending channel for a downside target that guards prospects of a move lower towards the bottom of the channel.
CAD/JPY H1 and H4 charts
The 4-hour chart is forming a W-formation which is a reversion pattern. However, we have equal highs for which the price could penetrate prior to a bearish 4-hour close. Nonetheless, the downside bias is favoured into the low 97's.
Looking at the hourly chart, the following outlines a potential schematic for the rest of the week as we head into the US red news calendar event on Friday morning:
The thesis is that while the outlook is bearish, the price discovery will be a theme between now and the data on Friday which also includes Japan's Consumer Price Index. The pump up from the low 96's may still be in process and the Asian session will lay out the foundations for the London and US session to base from.
In terms of liquidity, the following illustrates where stops are likely placed:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD pares gains to near 0.6650, as focus shifts to US CPI
AUD/USD is paring back gains to trade near 0.6650 in the Asian session on Wednesday, helped by renewed US Dollar weakness. Further upside appears capped amid RBA Hunter's comments while traders wait on the sidelines ahead of the crucial US consumer inflation data.
USD/JPY slumps toward 141.00 after BoJ Nagakawa's hawkish comments
USD/JPY meets fresh supply and plunges to its lowest in eight months, eyeing 141.00. The Japanese Yen receives a boost from the hawkish commentary from BoJ board member Nagakawa. Traders now look to key US CPI report for further trading impetus.
Gold price refreshes weekly top, tests short-term trading range hurdle ahead of US CPI
Gold price attracts some buyers for the third straight day on Wednesday and touches a fresh weekly high, around the $2.520-2,521 region during the Asian session. The commodity, however, remains confined in a multi-week-old trading range as traders await the release of the latest US CPI figures due later today.
Solana could rally as Breakpoint conference approaches
Solana is up 0.5% on Tuesday, following significant growth in its network daily active addresses. Investors anticipate a potential rally as the Solana Breakpoint conference approaches.
Five Fundamentals for the week: Jittery markets fear the ECB, US inflation and more Premium
Is there still a chance? Investors hope for a 50-bps rate cut from the Fed but also fear a global recession is underway. The world's three largest economies, the US, China, and the eurozone, are set to rock global markets.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.