The last 3 months has seen CADJPY fluctuating around the 21 week moving average and around the mid-point of the weekly Keltner channel. The market failed to extend the November negative break of the moving averages for spot CADJPY and RSI but, equally, the bounce above the averages at the turn of the year was also not sustained.
Given these circumstances CADJPY signals for sentiment cannot be strong but we are again looking for lower levels to develop after last week’s downward break and the reason we’re confident in that direction is the fact that if we widen the Oscillator analysis to include Momentum and Stochastics, we can see that those indicators have remained below their moving averages since Sept/Oct.
Downside targets include 87.32 and 86.75 with the immediate risk being a weekly close above the Marabuzo line created 2 weeks ago although only a confirming close above the Oscillator moving averages would turn medium term signals for sentiment clearly positive for CADJPY.
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