Noteworthy ascent and resistance
The CAD/JPY pair approaches a significant resistance zone following a sustained upward trend. Traders are cautious as historical levels suggest potential limitations to further gains. Furthermore, negative divergence in the Relative Strength Index (RSI) indicates a possible weakening of bullish momentum, hinting at an impending bearish phase. Market participants should closely monitor these developments for potential short position opportunities.
Chart Notes:
• Chart time-zone is UTC (+03:00)
• Candles’ time-frame is 4h.
The CAD/JPY currency pair has recently witnessed a noteworthy ascent, bringing the price line to a key resistance zone. This zone has historically acted as a barrier, impeding further upward movement. Moreover, traders should take note of the emergence of negative divergence in the Relative Strength Index (RSI). As the price has continued to climb, the RSI has failed to confirm these higher highs, instead forming lower highs. This negative divergence indicates a potential loss of momentum and a divergence between price and oscillator, often preceding a bearish phase. With the price nearing a significant resistance level and the RSI signaling a weakening bullish momentum, traders are advised to exercise caution and monitor price action closely. A reversal or correction could be on the horizon, presenting an opportunity for short positions. However, it is important to conduct further analysis and consider additional factors to confirm the anticipated bearish phase before making any trading decisions.
• DISCLAIMER: Please note that the above analysis is not an investment suggestion by “Capitalcore Ltd”. This post has been published only for educational purposes.