- CAD/JPY bulls take on bearish commitments through weekly resistance.
- Monthly resistance is expected to hold and focus is on the downside below trendline resistance.
CAD/JPY is meeting a critical resistance zone which would be expected to hold, offering both downside and upside opportunities within a weekly congestion zone.
The following is a top-down analysis that illustrates the current opportunities that are in development.
The monthly chart shows that the price has run-up to the monthly resistance line which is expected to hold the bulls off.
This is a strong supply area, with resistance and old support in what is a 61.8% Fibonacci retracement of the prior bearish impulse.
The weekly chart offers prospects above the trendline resistance in a break of 82.00 with the price now through resistance which would be expected to act as support.
On a break below, however, the focus will be on the downside to 78.50 and beyond in what would be the beginnings of a bearish monthly continuation.
The daily chart is offering the most convincing direction in a retracement of a strong bullish impulse towards Fibonacci and confluence of structure levels.
In doing so, there is a high probability that the price will want to extend higher back into the supply zone on a break of the Sep highs.
So before focussing on the monthly correction, there are probably still opportunities in the meantime for both the bears an the bulls withing familiar weekly territories between 78.50 and 81.80.
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