CADJPY - Bearish but warning signs
|CADJPY remains in a negative trend but this week's firm rejection of 4 year lows is asking some questions of the cross.
The 21 week moving average capped CADJPY during May and early June and it was a negative move of the RSI beneath it's moving average that confirmed a bearish tone for the cross in mid-June. The market has not threatened the spot moving average since with this week's lowest levels since June 2012 meaning that prices have dropped by more than 5 big figures over the last 15 weeks.
But after reaching those lows and the lower band of a declining weekly Keltner channel a sharp rejection has taken this week's price action into positive territory. There is potential for CADJPY to create a Bullish Hammer pattern on Friday's close.
In addition RSI is oscillating around it's moving average - a warning sign that the bear trend may be near completion.
We're looking here at the 21 week average which currently comes in at 79.84. A weekly close above that point would confirm a positive tone for CADJPY. More conservatively, a close above the 13 week line, 78.69, would encourage some to square up.
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