CAD/JPY Will Likely Bounce Off 86.60

CAD/JPY moved sharply to the upside yesterday and climbed with over 130 pips before finally encountering a significant resistance at 86.60, which coincides with the (MA)89 indicator on the four-hour time-frame. The pair has been consolidating sideways ever since then and in the process of that consolidation it has formed multiple candlesticks – such as doji, spinning top and a hanging man – that are a signal for an impending move to the downside. If that signal is valid and the move to the downside does begin then we can likely expect a drop towards the closest support level at 86.00, which is the (MA)89 indicator on the one-hour time-frame, and a breakout below that level will probably lead to a further drop towards 85.80.