Since October 28, the CAD / JPY pair has been trading in a marked downtrend. On December 20, the pair tested the support 0/8 Murray around 87.50.
Due to the strength of the Japanese Yen as a safe haven and the weakness of the loonie as a result of the fall in the price of crude oil, this pair has reached extremely oversold levels.
A recovery of CAD / JPY is expected in the next few hours towards the 21 SMA at 88.33. A break above this level could add a positive outlook and the pair is expected to reach the top of the downtrend channel and the 200 EMA which sits at the same level around 89.41.
On December 20, the eagle indicator touched the 5-point level which represents an extremely oversold market. It is imminent that in the next few hours there will be a recovery of this pair and we could see a technical rebound above 87.50.
As long as it is trading above 0/8 of Murray, we will have an opportunity to buy CAD / JPY with targets at 88.33 (21 SMA), 89.06 (1/8) and up to 89.41 (200 EMA).
We should keep an eye on the evolution of the USD / CAD pair. While it remains below the strong resistance of 1.2939 (6/8), this could support the cross of CAD / JPY and could favor a recovery. So, we will have an opportunity to buy.
Support and Resistance Levels for December 21 - 22, 2021
Resistance (3) 88.90
Resistance (2) 88.53
Resistance (1) 88.11
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Support (1) 87.65
Support (2) 87.32
Support (3) 86.98
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A trading tip for CAD/JPY on December 21 - 22, 2021
Buy above 87.50 (0/8) with take profit at 88.33 and 89.41 (200 EMA), stop loss below 87.05.
