Technical Analysis – CADJPY meets pandemic trendline as bears lead
March 24, 2023 9:26 am
CADJPY snapped a two-month winning streak, extending its March losses to the 2023 low of 94.62 this week.
Strikingly, the price has also reached the extension of the support trendline drawn from the 2020 pandemic low at 95.00. Hence, although the momentum indicators keep decelerating in the bearish region, flagging more downside ahead, that could be an ideal place to go uphill. Note that the RSI and the stochastic oscillator are not far from oversold levels.
If the long-term trendline cracks, the pair could experience a sharp decline to 93.00. Falling lower, the bears may face a new challenge around the 91.55 zone, where the price stalled several times during October 2021-March 2022. The next pivot could occur around the 90.00 psychological mark.
On the upside, immediate resistance could emerge somewhere between the 96.00 level and the restrictive 20-day exponential moving average (EMA). Should the bulls head higher, the 98.00 number, where the 50-day EMA is currently located, could soften upside pressures ahead of the resistance trendline currently seen near 98.60. Another success here could lift the price straight up to the 200-day EMA at 100.15. Slightly higher, the 100.50-100.80 territory could be another struggle.
In short, CADJPY seems to be testing a make-or-break point. A clear close below the long-term support trendline and the 95.00 mark could cause an aggressive sell-off. Alternatively, a bounce up will need to stretch above 96.00 to gain fresh impetus.
CADJPY snapped a two-month winning streak, extending its March losses to the 2023 low of 94.62 this week.
Strikingly, the price has also reached the extension of the support trendline drawn from the 2020 pandemic low at 95.00. Hence, although the momentum indicators keep decelerating in the bearish region, flagging more downside ahead, that could be an ideal place to go uphill. Note that the RSI and the stochastic oscillator are not far from oversold levels.
If the long-term trendline cracks, the pair could experience a sharp decline to 93.00. Falling lower, the bears may face a new challenge around the 91.55 zone, where the price stalled several times during October 2021-March 2022. The next pivot could occur around the 90.00 psychological mark.
On the upside, immediate resistance could emerge somewhere between the 96.00 level and the restrictive 20-day exponential moving average (EMA). Should the bulls head higher, the 98.00 number, where the 50-day EMA is currently located, could soften upside pressures ahead of the resistance trendline currently seen near 98.60. Another success here could lift the price straight up to the 200-day EMA at 100.15. Slightly higher, the 100.50-100.80 territory could be another struggle.
In short, CADJPY seems to be testing a make-or-break point. A clear close below the long-term support trendline and the 95.00 mark could cause an aggressive sell-off. Alternatively, a bounce up will need to stretch above 96.00 to gain fresh impetus.
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