Technical analysis
The CADJPY pair is at risk of further heavy losses as the Relative Strength Index indicator is issuing a strong sell signal.
The daily time frame shows that the CADJPY pair could test towards the bottom a descending broadening wedge pattern, around the 86.00 support zone.
What the possible outcomes are
In our most likely scenario, the downward price trend continues in the medium-term horizon, with the CADJPY pair eventually falling towards the 86.00 support level.
Alternatively, the CADJPY pair will stage a recovery from slightly below current trading levels and then start to rally back towards the 89.25 resistance level.
Key levels
Support 86.80 86.00
Resistance 88.00 89.25
