In a previous analysis on CAD/JPY we noted that price was inside a bullish channel. A break out of the bullish channel would be a bearish signal with a pull back target towards 84.20. Price has broken out of the bullish channel and after a back test rejection, has now reached 85.70.

Blue lines - Fibonacci retracement levels

CAD/JPY is approaching the first important short-term support level at the 38% Fibonacci level. This level is at 85.20. The next support level of 50% retracement is at our bearish signal target of 84.20. Resistance is at 86.70-86.90 area. As long as price is below this level then it is vulnerable to a deeper pull back.