On July 28, after rejecting the support area near 94.50, CADJPY formed a double bottom. However, the support area has been broken on August 03, sending the price slightly lower.
With the clear downtrend, the pair is in the correctional phase now, where it is rejecting R1 (94.84), that is 38.2% Fibonacci retracement level applied to the last wave down (29.07 high and 04.08 low). At the same time, CAD/JPY is trading near the downtrend trendline that is likely to be tested and potentially rejected throughout the next couple of days.
While the Demarker oscillator is in overbought zone, consider selling CAD/JPY near R1, targeting S2 (92.86) area that is 161.8% Fibonacci level applied through a low reached on July 09 and a high hit on July 13. A close above R2 (95.33) could be used as a signal to close short positions.
Support: 94.46 and 92.85
Resistance: 94.84 and 95.32
