CADJPY Can Be On the Verge of Bearish Reversal

The Canadian Dollar (CAD) fell against the Japanese Yen (JPY) on Monday, dragging the price of CADJPY to less than 85.70 after the emergence of a bullish engulfing candle and some major economic releases. The technical bias remains bullish because of a Higher Low in the recent downside move.

Technical Analysis

As of this writing, the pair is being traded near 85.64. A support may be seen around 84.52, the intraday low of Friday ahead of 83.64, the low of the recent dip on smaller timeframes and then 83.00, the psychological number.

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On the upside, the pair is likely to face a hurdle near 86.21, the intraday high of Friday ahead of 87.04, the swing high of the last major upside rally and then 90.00, a major psychological level. The technical bias will remain bullish as long as the 79.27 support area is intact.

Canada Unemployment

Canada’s economy lost an unexpected 2,300 jobs in February, and the jobless rate ticked up to 7.3 per cent, Statistics Canada said Friday. The data agency said the unemployment rate last month was at its highest level since March 2013, almost three years ago. The February jobs figure surprised economists, who had forecast Canada would add almost 8,500 jobs, according to a survey conducted by Bloomberg.

Trade Idea

Considering the overall technical and fundamental outlook, selling the pair around current levels could be a good strategy if we get a valid bearish reversal candle on the daily chart.

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Usman Ahmed

Usman Ahmed is an individual forex trader and market analyst. He holds a Masters of Business Administration (MBA) degree. His work includes fundamental and technical reports on various currency pairs, commodity futures and stock markets. His technical analysis features price action strategies.

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