CADJPY: Cross Ready to Test Major Support

The CADJPY cross has been dropping over previous days and declined back below the 100-day moving average. The price was 0.20 per cent weaker during the London session on Tuesday and the Loonie cost 85.30 JPYs.

The next level for bears could be at 84.80, where both the long-term bullish trend line and the 200-day moving average are located. This could be the major support for the CADJPY cross. If the price remains above, the medium-term outlook still seems bullish. However, if this support is taken out, we could see a quick decline toward 84.00 and the upward outlook could be negated.

On the upside, the first stronger resistance could be at the 100-day moving average near 85.75 and if broken, the Loonie could advance to 86.50 in the initial reaction.

The RSI indicator is dropping to new swing lows, below the 45-support level, which seems negative for the price and the cross might follow the indicator lower, therefore, the short-term outlook could be bearish and it could target the mentioned support.

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