After the bulls failed to mark their presence in the market, the bears took a decisive move and brought the price under 81.30.
After the appreciation from the 78.22 low, the price on the Canadian dollar versus the Japanese yen currency pair respected some important graphical landmarks. The first is the 81.38 solid support area, which the price had to confirm in order to continue the upwards move. As it did so, 82.71 was pierced and confirmed as support, favoring further advancement. Then, 83.81 — an ex-solid support area — gave way and price topped at 85.30, a point from which what could have been an angled rectangle began to form. The potential rectangle confirmed the required two highs — 85.23 and 84.35 — and two lows — 81.63 and 80.92. From the last low, the bulls managed to recover by labeling the low as a false piercing of the 81.38 solid support area and ascending very close to 82.71.
But 82.71 proved to be a well guarded bearish level, as the result of this upwards move was a drop that tried, to no avail, to find support at 81.38. The drop continued and took the price under the solid support area and under the support line of the angled rectangle, thus bringing an end to the possibility that the bulls were expecting to materialize: the conclusion of the pattern in its natural way, as a continuation of the appreciation with a target around 86.12, respectively.
In the current context 80.00 is a first target, followed by 78.22.
The price is in a descending move and all the appreciations are taken advantage of by the bears, pushing the price further to the south.
80.64 may or not be confirmed as a resistance, but the first target for the developing drop is represented by 80.17 and once that gets taken out 79.82 is next.
If, by any means, the price regains 80.45, then it would still be a chance on the bears side. A pause would only be offered if price gets above 81.55.
Levels to keep an eye on:
D1: 80.00 78.22
H4: 80.64 80.17 79.82 81.11
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