• CAD/JPY bulls are advancing but bearish outlook.
• Tomorrow there will be important data in both the US and Asia.

CAD/JPY it is on the watch list for the rest of the week as the price moves outside of a major trend line on both the long-term and short-term charts. Here are the scenarios for the rest of the week and next:

CAD/JPY daily chart

Bears are lurking at the breakout of the trend line and price is rolling below it as illustrated above. A breakup could be imminent:

The price has been moving away from the now broken trend line. The bearish target at the extreme is near 91.70 while the bullish targets are 99.70 and 101.10:

Meanwhile, the channel is compelling and the downtrend is favorable in the short term despite being on the back of the recent downtrend:

The daily W formation sees support near 96.00 within the descending channel for a bearish target that protects prospects of a move lower towards the bottom of the channel.

CAD/JPY H1 and H4 charts

On the 4-hour chart we see a W formation, which is a reversal pattern. However, we do have equal highs that the price could break through before a bearish 4-hour close. However, the bearish bias is favorable towards 97.

Looking at the hourly chart, below is a possible outline for the rest of the week as we head into the US major event on Friday morning:

The thesis is that although the outlook is bearish, price discovery will be the main theme from now until Friday’s data, which also includes Japan’s Consumer Price Index. The rally from the low 96 levels may still be in the works and the Asian session will set the stage for the London and US session.

In terms of liquidity, the following illustrates where the stops are likely to be placed: