What happened? Japanese shares fell on Monday…
CAD/JPY on the way to reach 92.16 in a long-term basis
2019-11-11 • Updated
A strong demand zone has been found between 81.83 and 79.73 (50% - 61.8% Fibonacci retracement levels), where CAD/JPY managed to resume the bullish bias held since November 2016. Such rebound could help the pair to reach the long-term target placed around 92.16, where it’s located the -23.6% Fibonacci retracement zone. To the downside, pullbacks should be limited by the 200 SMA at Daily chart.
The RSI indicator in this timeframe still favors the bullish bias, but it’s entering the overbought territory, favoring to possible corrective pullbacks that should help to erase overbought levels across the board.
USDCAD began the week slightly higher reaching as high as 1.2510 but failed to sustain these gains.
All eyes are headed toward the Bank of Canada today. Estimates point to no change both for the main rate and the ongoing QE which stands at $3B weekly.
A comparative examination of the strength of the US-Dollar often gives tangible insight into the direction of Gold (XAUUSD). The chart above indicates the expectation of a bullish price reaction from the demand zone
The US Dollar has been remarkably sluggish for the past few weeks despite being within a distinct Demand zone. My expectation of a springing rebound off the demand zone has not exactly played out yet, however, the zone remains unbroken.
For those who may be unfamiliar with Price Action trading, the horizontal arrows represent areas where the market structure was broken. As you can see in the scenario above, price broke below the previous low at the two marked instances