© Dukascopy Bank SA
While during the last two months of 2013 CAD/JPY was exhibiting strong bullish momentum, a test of 99 not only has lead to a complete negation of these gains, but actually pushed the price further south past the point of this rally's origin, specifically down to 0.91.
Right now the currency pair is at the upper trend-line that forms the bearish channel. Consequently, there is a high chance that the resistance at 93 will prevent the loonie from appreciating and instead will force it to decline. Eventually, the rate is expected to touch the lower down-trend line, probably somewhere near 88. Most of the traders have opened positions in this direction—63% of them are short.
© Dukascopy Bank SA