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CAD/JPY Formed and Confirmed a Double Bottom this Week

CAD/JPY fell from a high last week around 96.40 to a low this week around 94.15. After this swing, CAD/JPY formed a double bottom as we can see in the 1H chart.

CAD/JPY 1H Chart 2/27
(click to enlarge)

As the week winds down, price action has respected the double bottom as support, held above the moving averages and thus looks poised to test and break the 95.88 high. The RSI also reflects development of bullish momentum as it tagged above 70 and has since held above 40. 

CAD/JPY Daily Chart 2/27

(click to enlarge)

In the daily chart, we can see a key resistance around 97.00, which is reinforced by a previous support, the 200- and 50-day SMAs, and most importantly, a falling trendline from the 2014-high made in December just above 106. 

If the RSI also approaches and stalls around 60 while price tags and holds at 97.00, we should expect a bearish attempt at least towards the lows just above 94. But if the prevailing downtrend is to continue, we have the 92.00 handle in sight as well. 

If price does not push above 95.88, and instead falls right back below 95.00, we might have a bearish continuation without the test of the resistance cluster around 97.00.