CADJPY is on a short-term uptrend, as a rising trend line can be drawn to connect price lows since August on its 1-hour forex chart. Price is currently testing this ascending support zone and may be due for another bounce to its previous highs or beyond.
At the same time, stochastic is indicating a pickup in buying pressure, which might be enough for CADJPY to sustain its climb. A bullish divergence is playing out, after stochastic made lower lows while price made higher lows, further adding confirmation that bulls are in control of price movements for now.
Further gains could take CADJPY up to the 97.70 level or its previous highs while a stronger bull run could push it past the 98.00 major psychological level. On the other hand, a break below the rising trend line could be an early reversal signal and the start of a short-term downtrend for the pair.
By Kate Curtis from Trader’s Way