Hi Traders! CADJPY forecast follow up and update is here. On September 29th I shared this “Technical Analysis – CADJPY 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!
On the H4 chart, based on the Heikin Ashi candles we can see that currently, we have strong bullish bodies in upward moving market conditions so it basically reflects a bullish environment. Also, the price which is moving higher has created a bullish trend pattern in the form of three higher highs, higher lows, we may consider this as evidence of bullish pressure. Generally, after a bullish trend pattern, we may expect corrections and then potential continuation higher. Currently, it looks like a correction is happening, also we had two strong resistance zones that has formed and the price which was moving higher has broken above these zones and is holding above them. After the breakout these strong resistance zones are acting as two strong support zones for us. Until both these strong support zones shown in the image below hold my view remains bullish here and I expect the price to move higher further.
CADJPY H4(4 Hours) Chart Current Scenario
Based on the above-mentioned analysis my view was bullish here and I was expecting the price to move higher further until the strong support zones hold. The price action followed my analysis here exactly as I expected it to. After the bullish trend pattern, we had a pullback and the price which was moving lower reached the first strong support zone, respected it and bounced higher from this zone delivering around 160+ pips move until it was blocked by a bearish divergence.
On the M15 chart, the market provided us with various facts supporting the bullish view. The price which was moving lower created a bullish divergence between the first low that has formed at 87.636 and the second low that has formed at 87.178 based on the MACD indicator. The price then moved higher and broke above the most recent downtrend line, we may consider these as facts provided by the market supporting the bullish view. Then as you can see in the image below how the price moved higher after that and provided an amazing move to the upside.
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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 bullish 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 at majority of the times 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.
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Traders Academy Club Team.