CADJPY is one of the worst performing currency pairs today. Canadian dollar underperforms along with other commodity currencies amid deterioration in moods while Japanese yen gainso n the flight for safety.
The pair has tried to break above the 50% retracement of the recent downward move earlier this week but each attempt turned out to be a failed one. The pair took a dive lower today and tested the support zone at 38.2% retracement (87.20 area). The initial attempt of breaking below turned out to be a failed one but one cannot rule out a retest in the later part of the day. Should we see a recovery move launched from this area, the nearest support to watch is the aforementioned 50% retracement area (88.00 area). However, traders should keep in mind that breaks above this zone can be false breakouts as it was with attempts earlier this week (orange circle).
It may be better to wait for the pair to break above the 88.35 area before considering going long as this was the area that halted previous false breakouts.
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