The CADJPY cross has been moving higher in previous weeks and rose to about 3 big figures from September lows. It was consolidating on Wednesday and stalled at a major resistance of around 87.15.
Bulls are now trying to push the price above the mentioned resistance, which stands at May's highs. If the CADJPY cross settles above, further upside potential toward 87.50 could occur. However, if the price breaches above, the trend could switch to bullish, with the next target located at 88.00 and eventually around 50 pips higher.
On the downside, the first support is now at August highs at 86.55 and slightly below, where the bullish trend line stands. As long as the cross remains above, the short-term outlook seems positive, but bulls need to push the price to new swing highs to confirm this bias. Should the price decline below 86.35, bears could be strong, targeting 85.50 in the initial reaction.
The RSI indicator is following the price to new highs, confirming bullish momentum. Volatility could be higher today, mainly due to the FOMC meeting, which concludes tonight.
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