CAD/JPY is now pressing 85.40 key support level after this week’s steep decline. Sustained break of this support would carry rather bearish medium term implications. Firstly, that would complete a head and shoulder top reversal pattern (ls: 88.06, h: 91.16, rs: 88.44). Secondly, 55 week EMA (now at 85.24) would be firmly taken out. Thirdly, that could also confirm completion of whole rise from 73.80 (2020 low) at 91.16, as a leg in the sideway pattern that started at 74.80 (2016 low), after rejection by 91.62 key resistance (2017 high).
Sustained break of 85.40 would push CAD/JPY to 100% projection of 91.16 to 85.40 from 88.44 at 82.68. That is close to 50 % retracement of 73.80 to 91.16 at 82.48.
