CADJPY remains under strong pressure after the pullback on the 89.60 resistance level on January 17. The pair plummeted towards the ascending trend line, which has been holding since September and dropped below the two-short-term simple moving averages, 20 and 40.
Looking at the daily timeframe, technical indicators are holding below their neutral levels. The MACD oscillator slipped below its trigger line in the bullish area, however, the RSI indicator is pointing to the downside in the negative territory.
If price action drops below the 23.6% Fibonacci retracement level of the last up-leg at 87.65 with the low of 74.80 and the high of 91.60, it could open the way for the next immediate support area 86.70 – 87.20. Clearing this key level would see additional losses towards the 38.2% Fibonacci mark, which stands near the 85.40 support barrier.
Upsides moves are likely to find resistance at the 89.60 obstacle. Rising above this area would help to endorse the focus to the upside towards the 4-month high of 91.60.
