Chart of the day CADJPY may see further upside in short term

Short-term technical outlook on CAD/JPY (Fri, 18 May)

Key technical elements

• Since its 19 Mar 2018 low of 80.54, the CAD/JPY has started to evolve into a medium-term ascending channel with its upper limit/resistance at 87.90 and lower limit at 84.50/20 (see daily chart).
• The daily RSI oscillator has staged a bullish breakout from its former corresponding descending resistance and still has room to manoeuvre to the upside before it reaches an extreme overbought level of 86%. These observations suggest that medium-term upside momentum of price action has resurfaced.
• The key short-term support rests at 85.80 which is defined by the minor ascending channel support from 08 May 2018 low and the former medium-term range resistance from 13 Apr/03 May 2018.

Key Levels (1 to 3 days)

Intermediate support: 86.15

Pivot (key support): 85.80

Resistances: 87.10 & 87.90/88.00

Next support: 84.50/20

Conclusion

Therefore as long as the 85.80 short-term pivotal support holds, the CAD/JPY is likely to continue its up move to target the intermediate resistance at 87.10 before the medium-term resistance of 87.90/88.00 (medium-term ascending channel resistance from 19 Mar, pull-back resistance of former major ascending trendline support from 09 Nov 2016 & Fibonacci projection cluster).

However, failure to hold at 85.80 shall negate the bullish tone for a deeper pull-back towards the medium-term support at 84.50/20.

Charts are from eSignal

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