CAD/JPY breaks the downtrend line, flirts with 61.8% Fibonacci.
CADJ/PY has developed a short-term uptrend over the last month, which has now, broke the downtrend line to the upside. Currently, the upward move seems to be temporarily stalling as it encounters the 61.8% Fibonacci retracement level of the down move from 85.22 to the five-month low of 79.96 of 83.22.
Both the MACD and the RSI momentum indicators are flattening in positive areas and suggest a short-term pausing of the uptrend, as the pair tackles the 61.8% Fibo of 83.22. The 14-day simple moving average (SMA) and 21-SMA both point up, and confirm the bullish trend. ADX moved above the trend line and is currently above the 25 level, pointing up, confirming the increasing trend.
If momentum indicators continue their behavior and pick up speed above the 61.8% Fibo of 83.22, the next obstacle could be 84.34, but ultimately, a break above the high of 85.22 would confirm the bullish bias, targeting further resistance at 86.23 initially, and then around the 87.00 to 87.50 levels.
On the flip side, if the 61.8% Fibo level of 83.22 holds, the initial test would be the 50.0% Fibo level of 82.59 and then the 38.2% Fibo of 81.97 culminating around the 14- and 21-SMAs.
Overall, the very short-term outlook is positive as the bullish bias continues across indicators, and a break above the 61.8% Fibo levels would see this unfold.
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