CADJPY has been in the strong uptrend since COVID 2020 March lows.

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Looking at the monthly chart, we see it now turning sharply down from important 61,8% – 78,6% Fibonacci retracement and channel resistance line, which signals that 110 resistance can be in place, especially if we consider extreme RSI overbought levels.

If we take a closer look on a daily chart, we can see it potentially trading in a five-wave bearish impulse and the main reason is a decisively broken base channel support line. So, currently we are tracking wave 3, which means that we can expect more downside pressure for wave 5, but ideally after a pullback in wave 4 that can occur soon.

Technically speaking, CADJPY could drop even down to 90 area, but watch out for a temporary corrective slow down within wave 4, where ideal resistance comes around 100 level before a bearish continuation for the 5th wave.

Happy trading!

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