CAD/JPY is consolidating at the 86.60 zone, which lines up with a key support that the bulls had relied on for most of April.
What makes the level more interesting is that it’s also around a 50% Fib retracement of CAD/JPY’s recent downswing and is just below the trend line and 100 SMA resistance on the 1-hour time frame.
Will 86.60 become a resistance area for the Loonie? Shorting at the first signs of bearish momentum is a good strategy if you’re betting on CAD/JPY extending its downtrend in the next trading sessions.
If you think that the bulls have enough firepower to bust through the triangle support AND resistance areas, then you can also wait for CAD/JPY to trade above the SMAs before betting on possible retests of the 87.15 and 87.60 areas of interest.
If breakout trades are more your thing, then you’re gonna love that AUD/JPY is still inside an ascending triangle that had formed after a strong Q4 2020 for the Aussie.
84.50 is the resistance level to watch though the bulls will need to push the Aussie above 85.45 if they want to get new 2021 highs for AUD/JPY.
An upside breakout could lead to trips to the 86.75 and 89.00 previous inflection points.
But if the ascending triangle results in a downside breakout (triangles are indecision patterns, ya know), then we could see the Aussie test the 82.50 February and March lows or even the 100 SMA on the daily time frame.
Copyright© ftgfx.com 2020 | All right reserved