CAD/JPY Could Not Break Above 87.00 Yet Again

After it succeeded in breaking above the resistance zone around the middle line of Bollinger Bands and (EMA)89 indicators on the daily time frame around 85.30 and continued rising, yesterday the pair reached the strong resistance level on the same time frame at 87.00, visualized on the screenshot with the red horizontal line, but it failed to break above it.

CAD/JPY continued testing it in vain for almost 20 hours and eventually the pair started falling.

I think it is quite possible for the pair to continue falling towards 85.00, which would now be a level of support, rather than resistance.

If it does remain above that level, I think we will likely see it test 87.00 again. The alternate scenario is to break below 85.00 and continue falling towards the next support at 82.30 – 82.00, which is visualized by the lower band of Bollinger Bands on the daily time frame.

CAD/JPY Is Still Trying to Break Above the Resistance

Since the pair could not break above the resistance at 85.30 – 85.50 several days ago and opened with a bearish gap when the market opened this week, today CAD/JPY started testing the resistance level again.

The pair recovered the gap and continued climbing, reaching the same level it visited four days ago, at the resistance at 85.00, visualized by the blue line of the Bollinger Bands middle band on the daily time frame. A little above that level (85.30 – 85.60) is the other resistance level visualized by the green line of (EMA)89 on the same time frame.  It is obvious this is a very strong zone of resistance, but it is also very telling that the pair returned to that level so decisively which is an indication that CAD/JPY is still trying to break above it.

Another signal that supports this idea is the doji candlestick that formed on the weekly time frame, which suggests that the move to the downside might be over for now.

In case the pair does break above the resistance the next target is around 87.00.

It Looks Like CAD/JPY Will Continue Rising

After the false break below the trend line on the weekly time frame the pair fell with almost 200 pips, but it appears that was the end of the move to the downside, since CAD/JPY is once again climbing and is currently testing the resistance level at 85.30 – 85.50, visualized by the middle line of the Bollinger Bands indicator on the weekly time frame. On the daily time frame the same resistance level is visualized by (EMA)89.

It seems, however, that this time the pair will succeed in breaking above that level, so it can continue rising towards the next resistance level at 87.00 – 87.50. That is a quite strong resistance, since the pair has attempted to break above it twice and it has bounced off of it twice for the past two months (that is the red horizontal line on the weekly and daily time frames).

If the pair does succeed in breaking above that level the next serious resistance level is at 89.00 – 90.00.