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CADJPY’s attempt at reversing its downturn from last month has been met with resistance.
The exhaustion on the momentum indicator has seen a standard bearish divergence. This has been followed by a hidden bearish divergence that could take prices towards monthly lows.
Short bets at the 50% 81.57/77.58 Fibonacci leg limits the potential for prices to move back towards the $80 area.
With prices trading away from the Ichimoku cloud, this could cement the impetus to further downside.
A look on the shorter-term chart shows several attempts to break lower. However, the Ichimoku cloud is now closer to these breaks, indicating support.
Recent false breaks have led to support pushing prices towards the mid $79 range.
The double hidden bullish divergences noted on the momentum indicator suggests another attempt at the said support could be expected.
Should bears add further weakness to the CADJPY pair, then a push to the lower $78 area could be likely.
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