CAD/JPY Broke Key Trendline Resistance

\ 9:12 AM EDT \ November 26th, 2012
Forex Technical Update

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CAD/JPY Daily Chart 11/15/2012 9:00AM EDT

CAD/JPY 11/26/2012 daily chart

Bullish breakout, momentum: The CAD/JPY has had a very strong couple of weeks going from a recent consolidation range low around 78.77 to a break of that consolidation range (seen in the daily chart) as well as a key falling trendline (seen in the weekly chart). The RSI in the daily chart has tagged 70 and held above 40, reflecting persistent bullish momentum development.

Breakout target: The weekly chart also shows the RSI tag 70, hold above 40 this year, and now pushing back above 60. Indeed bullish momentum is building. As CAD/JPY crosses the 200-week SMA as well, it is now exposed to the 2012 high near 85.00. When a trendline is broken, we can sometimes look at its origin as a possible target. If that is the case, the long-term target would be 94.46, the 2010-high. That’s a long way’s to go, so let’s first focus on the 2012-high.

If there is a throwback, the previous consolidation resistance area should be seen as support around 81.40. I would not be surprised of even sharper corrections, but I think it should hold above 80.50 and the 200-day SMA. Below that, we are likely done with a false break out, which refocuses the CAD/JPY to the 78.70-80 consolidation support, and lower.

CAD/JPY Weekly Chart 11/26/2012 9:10AM EDT

CAD/JPY 11/26/2012 weekly chart

Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.

Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.

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