Hi Traders! CADJPY short term forecast update and follow up is here. On November 1st 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 Home Trader Club. Spoiler alert – free memberships are available!
On the H1 chart, we could see that the price has created a bullish divergence which formed between the first low formed at 107.707 and the second low formed at 107.484 based on the MACD indicator. The price then moved higher and broke above the last high at 108.396 creating higher highs, thus forming a classical setup of bullish divergence followed by bullish convergence, we may consider these as evidence of bullish pressure. In addition to this, the ADX indicator gave a bullish signal here as well, at the cross of +DI (green line) versus -DI (red line) and the main signal line (silver line) reads a value over 25, we may consider this as yet another evidence of bullish pressure. Also, currently, there are no signs opposing this bullish view here as well. So based on all this, until the key support zone shown in the image below (marked in green) holds my short-term view remains bullish here and I expect the price to move higher further after pullbacks.
CADJPY H1(1 Hour) Chart Current Scenario
In this pair on the H1 chart, based on the above-mentioned analysis my short-term view was bullish and I was expecting the price to move higher further until the strong support zone holds. The price action followed my analysis here exactly as I expected it to. After the bullish convergence, the pullback that I was looking for happened and then the price moved higher further as I expected it and delivered 220+ pips move to the upside!
On the H1 chart, the market provided us with various facts supporting the bullish view. After the bullish convergence the price which was moving lower created a bullish hidden divergence between the first low that formed at 107.466 and the second low that formed at 108.874, followed by a continuing bullish divergence between the first low that formed at 108.874 and the second low that has formed at 108.474 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 excellent move to the upside!
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 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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