Technical Analysis – CADJPY jumps to 2-month high but needs steeper moves for bullish bias

Melina Deltas, XM Investment Research Desk

CADJPY looks to be mostly neutral despite the latest ascent move from the 77.65 low. Currently, the pair is testing a new two-month high and if there is a bounce off at the 81.90 resistance it could endorse the horizontal trajectory.

The short-term oscillators reflect a positive momentum. The RSI, in the positive area, has moved above its 50 level and is approaching the overbought region. Additionally, backing this view are the stochastics, which are currently flirting with the 80 level emitting signals of a possible pullback.

To the upside, an initial important resistance region from the 81.90 high to the 82.20 hurdle could prove difficult to overrun. Conquering this, the 84.75 high registered on February 20 could halt the climb.

Otherwise, if sellers manage to close decisively below the 23.6% Fibonacci retracement level of the upward move from 73.75 to 81.90 at 79.95, this could encourage the price to hit the 20- and 50-day simple moving averages (SMAs) at 79.16, inside the Ichimoku cloud. Falling below this, the 38.2% Fibo of 78.78 may challenge bears’ efforts to revisit the 50.0% Fibo of 77.83.

All in all, CADJPY seems to be searching for an upside recovery, though only a closing price above the 81.90-82.20 territory would convince that the bias is shifting to bullish in the medium-term.