Hi Traders! CADJPY short term forecast update and follow up is here. On December 13th I shared this “CADJPY Technical Analysis Based On Our In House Indicators” 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 Home Trader Club. Spoiler alert – free memberships are available!
My Idea
Looking at the daily chart, based on the KTL indicator, we could see that the price which was moving lower was blocked by a daily support zone. The price respected this zone and is currently moving higher from it. Generally, after a bearish convergence, as per the book, we may expect pullbacks and then a further continuation lower. So, after the weekly bearish convergence currently, it looks like a pullback is happening on the daily chart. So until the two key resistance zones based on our KTL indicator (marked in blue) shown in the image below hold my view remains bearish here and I expect the price to move lower further after pullbacks.
CADJPY D1(Daily) Chart Current Scenario
Based on the above-mentioned analysis, on the daily chart, my short-term view was bearish here and I was expecting the price to move lower further until the two key resistance zones (based on our volume profile Key Trading Levels Indicator) hold. The price action followed my analysis exactly as I expected it to here. After the bearish convergence, the pullback that I was looking for happened and then the price moved lower further and delivered 460+ pips move so far!
We had facts supporting the bearish view on the H4 chart. We had a flat correction in the form of a range and the price which was respecting this range moved lower and broke below the bottom of it. We may consider this as a hint provided by the market supporting the bearish view and also there were no signs opposing this bearish view. We then had a pullback and then the price moved lower further and provided an extraordinary move to the downside as you can see in the image below.
So, traders, this is why I wanted to show this example to help you understand how important it is to follow the facts. The facts were supporting the bearish view here and there were no signs against it. When the facts do happen as we expected you can see how the price perfectly moved as per the plan. Because these are the kind of hints the market provides us with the majority of the time and it’s our obligation as traders to be able to listen to these things that the market tells us and we should try to make the right actions accordingly.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team.
