The CADJPY pair has moved higher in the last few days as a risk on tone has returned and NAFTA talks look promising. The US, Canada and Mexico have all stated that they are making positive progress in forming a new trade agreement. Price is trading around 85.130 at present not far from the centre of the consolidation area on the chart. The price action shows lower highs and higher lows with a 300 pip narrowing range. Resistance for the pair comes in at 85.600 with the trend line positioned at 86.000. A break above the trend line would be confirmed with a move above 86.285. If price can manage to break above 87.000 and the 87.100 area the 89.000 is an upside target for buyers. Support for the pair is coming in initially at 85.000 followed by the 84.505 level. A loss of 83.635 draws focus to the rising trend line at 83.150 and creates a lower low. Taking out the swing low at 82.175 would confirm the break down and paint a bearish pennant continuation pattern with a first target at 80.000 followed by 76.000.
The GBPUSD pair is in focus this week as the Annual Jackson Hole event kicked off yesterday in the US with Central Bankers outlining their views on macro policy and providing catalysts for moves in financial markets. The chart shows that Cable has hit resistance at 1.2940 on Wednesday and dropped to support at 1.2800 today where the rising support trend line is positioned. This line seems for now to be part of a bear flag pattern looking to target the 1.2600 level. The low at 1.2669 can be a key level if buyers try to defend it.
Resistance for Cable as mentioned is located at 1.2940 with a break higher to 1.3000 taking out the falling resistance trend line shown in brown and triggering a larger retracement of the move lower this summer. This move would need to clear 1.3050 to be confirmed and reaches a major hurdle at 1.3200. A move above this level would force many sellers to take profit which can be repeated again at 1.3400.