CAD/JPY 4H Chart: Descending Triangle

Source: Dukascopy Bank SA
© Dukascopy Bank SA
As CAD/JPY was unable to sustain a rally above 96, it entered a consolidation phase, being supported by a strong demand around 94. According to the technical indicators, a break-out to the upside is more likely than a pronounced dip. If this is the case, we should expect a re-test of the July high at 96.23 once the currency pair crosses a 40-pip supply area beneath 95. This resistance is reinforced by the weekly R1, Jul 24 high and 200-period SMA. On the other hand, should the bears take control of the situation, we will expect the sell-off to extend down to the Apr 14 low at 92.28. Meanwhile, the market itself is undecided—51% of positions are long and 49% are short.
© Dukascopy Bank SA
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