MarkMcCartney
Long

CAD/JPY - Retest of support

FX:CADJPY   Canadian Dollar / Japanese Yen
Last week we seen a strong selloff (due to strength of JPY not weakness of CAD) but towards the end of the week we found support from below. Looking at the chart you can see we are trading within a rising channel with the middle trend-line aligning with the daily 200EMA. I believe we will find support here and give us a, what I call, a "double-bounce"; meaning there are two indicators aligning at the same point therefore increasing their weight.

I would expect price to bounce from this area and begin ranging between the middle and upper trend-lines within this channel and eventually breaking out to the support.

I am bullish on this pair and expect the retest of the upper trend-line to be on 22nd October (going by previous bullish moves).

Note: the bullish move will be because of weakening JPY as the Asian markets bounce back from the stock selloff last week. I would suggest a tight stop-loss as Trump's trade war with China could have a knock on effect with the Asian markets. Strength of the Index will weaken the currency - weakness in the Index will bring strength to the currency.

Comment: Yesterday price tested the daily 200EMA as expected and gave strong rejection. This morning has been bullish. I expect price to test the 13EMA above next then retrace to 86.50 and find support then aim for the top trend-line of this channel.

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