Hi Traders! CADJPY short term forecast follow up and update is here. On June 29th I shared this “CADJPY Technical Analysis And Short Term Forecast” post in our blog. In this post, let’s do a recap of this setup and see how it has developed now. If you would like to learn more about the way we trade and the technical analysis we use then check out the Traders Academy Club. Spoiler alert – free memberships are available!
My Idea
Looking at the H4 chart, we could see that after the first move down currently it looks like a correction is happening in the form of potential double wave to the upside. Also, we have a bearish divergence that has formed between the first high that has formed at 105.838 and the second high that has formed at 106.232 based on the MACD indicator which we may consider as evidence of bearish pressure. In addition to this, we have this bearish divergence on the RSI indicator as well, which we may consider as yet another evidence of bearish pressure. Until the strong resistance zone (marked in red) shown in the image below holds my short term view remains bearish here. A valid breakout below the most recent uptrend line would be the validation for this short term bearish view.
CADJPY H4(4 Hours) Chart Current Scenario
In this pair based on the above-mentioned analysis my short term view was bearish here and I was expecting the price to move lower further until the strong resistance zone holds. Also, I mentioned that “A valid breakout below the most recent uptrend line would be the validation for this short term bearish view”. The price action followed my analysis exactly as I expected it to here. The validation for the bearish view which is a valid breakout below the most recent uptrend line happened and then we had a pullback, the price then moved lower further and delivered 270+ pips move before the price moved higher.
On the H1 chart, the market provided us with various facts supporting the short term bearish view. After the breakout below the H4 uptrend line, we had a pullback on the H1 chart with the price creating a continuing bearish divergence between the first high at 105.530 and the second high at 106.131 based on the MACD indicator. The price then moved lower and broke below the most recent uptrend line which we may consider as facts provided by the market supporting the bearish view. Also there we no signs opposing this bearish view. Then as you can see in the image below how the price moved lower after that and provided an amazing move to the downside.
(Note: You can learn about a Killer Forex Strategy “Double Trend Line Principle” here)
So traders when it comes to trading, there are various important factors that we need to pay attention to, just because we have a good setup doesn’t mean that we can enter the trade randomly and it will pay us huge profits. First of all, we need to validate the entry and we should have a perfect entry plan to get into the trade which is a key factor when it comes to trading. This CADJPY short term forecast is yet another good example of this scenario.
For similar trade ideas and much more I invite you to
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Happy Trading!
Arvinth Akash
Traders Academy Club Team.
