Looking on weekly chart we will notice that CADJPY has been moving for a long time in a broad consolidation. As a result of recent increases, the market reached local resistance at 89.00, where supply reaction occurred. It is also worth noting that in November last year we have already breached the downward trend line, which we then tested very precisely as support.
On H4, we note that the bullish trend lasting for past two weeks has drawn a formation of ascending triangle. Given that the dynamics of this movement is much smaller than in case of the earlier declines, we believe that this is a correction and in the near future we can expect return to declines.
Currently pair is in area of upper limitation of triangle formation. For a bearish scenario to be realized, we would have to reject that resistance and break out the bottom of the formation. If this happens, we could expect continuation of declines even to around 84.50.
