CAD/JPY has been in bullish correction mode following the bounce off the 80.55 support level. The pair posted two consecutive weekly green sessions after it recorded an almost one-year low. The short-term technical indicators are endorsing the upward retracement in the price action.
Technically, in the daily chart, the MACD oscillator continues to move higher towards its zero line and also stands above its trigger line, while the RSI indicator is holding near the 50 level, suggesting that the slightly positive movement continues.
In case of a continuation of the bullish retracement, the price could touch the 40-day simple moving average (SMA), near 83.13, which overlaps with the 23.6% Fibonacci retracement level of the down-leg from 91.60 to 80.55. A jump above this region could drive the pair towards the 83.50 resistance level. Moreover, if buyers manage to push above that barrier, the pair could hit the 38.2% Fibonacci mark of 84.75.
Further losses should see the April 2017 low of 80.55 acting as a major support. A drop below this zone could reinforce the bearish structure in the short-term and open the way towards the next key level of 0.7970, taken from the high in October 2016.
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