I roll out of bed today and what do I see? The CADJPY just broke down from a symmetrical triangle! With stochastics already in oversold conditions, are there any sellers left out there? Considering how bearish the last couple candles were, I think we could see price drop further, before it tests major support at around 90.25. I have a feeling that buyers are eyeing that 90.25 area – it has proven to be a key area of interest in the past.
Next, let’s skip on over to the USDJPY. I’ve popped on the daily chart and what do I see? A couple of signs that we could be in for a reversal! First, it appears that the pair has formed a double top on the daily chart, as price has twice tested the 95.00 handle but has failed to break through. Secondly, a shooting star candle stick formation has just formed on the most recent high, which suggests that buyers are losing steam to bring the pair higher. Lastly, a bearish divergence has formed, with price forming slightly higher highs, but stochastics showing lower highs. If sellers do come in to enforce their will, look for them to bring price down and test support at 91.80. Then again, if we suddenly see price rise above the 95.00, who knows where the pair may be headed?!
Weekly charts ain’t usually my thing but just thought I’d pull out the EURJPY weekly chart to figure out how low this pair could go. After bumping the support turned resistance around the psychological 128.00 handle, the pair took a dive and found support around 120.00. Is the pair simply waiting for more sellers before sliding lower? Well, it has been breaching one support level after another and if it does break below 120.00, the next support level in sight is located around the 113.50 to 114.00 area. But if buyers suddenly take control, the pair could pull back up until the resistance at 128.00.