Chart Of The Day Risk of further minor corrective decline for CADJPY

Blue avatar for guest contributors
By :  ,  Financial Analyst

Short-term technical outlook on CAD/JPY (Tues, 10 Apr)

Key technical elements

  • Since its low of 74.83 printed on 09 Nov 2016, the CAD/JPY has been evolving within medium-term complex range configuration. The recent rebound from the Mar 2018 low of 80.60 has stalled at a medium-term resistance of 85.75 which coincides with the former swing low area of 11 Aug 2017 before it gave way for a steep decline of 500 pips to print the Mar 2018 low of 80.60 (see daily chart).
  • Since its 85.75 high of 13 Apr 2018, the CAD/JPY has started to evolve into a minor “Expanding Wedge” configuration with its upper limit/resistance at 85.10 and lower limit/support at 83.75/60 (see 1 hour chart).
  • The aforementioned “Expanding Wedge” support also confluences with the ascending trendline from 19 Mar 2018 low and a Fibonacci cluster (38.2% Fibonacci retracement of the recent up move from 19 Mar low to 13 Apr 2018 high & the 1.00 Fibonacci projection of the down move from 13 Apr 2018 high to 21 Apr 2018 low projected from the 24 Apr 2018 minor swing high).
  • The daily RSI oscillator has started to pull-back from a significant resistance level at the overbought region coupled with the shorter-term hourly Stochastic oscillator that has inched down from its extreme overbought level of 93% and still has room for further potential downside before it reaches its extreme oversold level of 8%. These observations suggest that short-term downside momentum of price action has resurfaced.

Key levels (1 to 3 days)

Pivot (key resistance): 85.10

Supports: 84.30 & 83.75/60

Next resistance: 85.75


Therefore as long as the 85.10 key short-term pivotal resistance is not surpassed, the CAD/JPY is likely to shape a further minor corrective decline within the “Expanding Wedge” configuration to retest the 84.30 minor swing low of 21 Apr 2018 before targeting the significant short-term support zone of 83.75/60.

On the other hand, a clearance above 85.10 invalidates the corrective decline scenario for a squeeze back up to retest the 85.75 medium-term resistance.

Charts are from eSignal


This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this email, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs. All queries regarding the contents of this material are to be directed to City Index, a trading name of GAIN Capital Singapore Pte Ltd.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit for the complete Risk Disclosure Statement.

Related tags: Forex

Open an account today

Experience award-winning platforms with fast and secure execution.

Web Trader platform

Our sophisticated web-based platform is packed with features.
Economic Calendar