By Dan Eduard – Over the last several weeks, the Canadian dollar has been steadily losing ground to the Japanese yen. The yen, widely considered to be a safe-haven currency, has been making gains across the board as investors continue to shy away from risk taking. Since October 7th, the CAD/JPY pair has gone down over 250 pips. As we will demonstrate through a number of technical indicators, the pair may be due for an upward correction.
We will be looking at the daily chart for CAD/JPY, provided by Forexyard. The technical indicators we will use are the Williams Percent Range, Stochastic Slow and the Relative Strength Index (RSI).
1. The Williams Percent Range is currently right above the -80 level. Should the indicator drop below -80, traders could take this as a sign that the pair is in oversold territory and due for a bullish correction.
2. Traders will notice the bullish cross formed below the support line on the Stochastic Slow. Typically when a cross, such as the one shown here forms, an upward correction takes place.
3. Finally, in what may be our strongest signal yet of an impending bullish move, the RSI is floating in oversold territory, and has been for some time. Traders can take this as a sign that the pair will see an upward correction in the very near future.
Forex Market Analysis provided by ForexYard.
© 2006 by FxYard Ltd
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