Hi Traders! CADJPY short term forecast update and follow up is here. On November 22nd 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!
My Idea
On the H1 chart, the price which was moving lower has created a bearish trend pattern in the form of three lower highs, lower lows which we may consider as evidence of bearish pressure. Generally, after a bearish trend pattern we may expect corrections and then further continuation lower. Currently, it looks like the correction that we are looking for is happening and in addition to this, there are no signs opposing this short term bearish view at the moment. Also, we had two strong support zones that has formed and the price which was moving lower has broken below these zones and is holding below them. Currently, these strong support zones are acting as strong resistance zones for us. Until these two strong resistance zones (marked in red) shown in the image below hold my short term view remains bearish here and I expect the price to move lower further.
CADJPY H1(1 Hour) Chart Current Scenario
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 two strong resistance zones hold. The price action followed my analysis exactly as I expected it to here. After the bearish trend pattern, we had a pullback and the price which was moving higher reached the second strong resistance zone, respected it and then it bounced lower from this zone and delivered 570+ pips move to the downside as you can see in the image below!
On the H1 chart, the market provided us with various facts supporting the bearish view. The price, which was moving higher, created a bearish divergence between the first high, formed at 109.292 and the second high, formed at 109.965 based on the MACD indicator. The price then moved lower and broke below the most recent uptrend line. We may consider these as facts provided by the market supporting the bearish view, and also there were no signs opposing this bearish view. Then as you can see in the image below, how the price moved lower further after that and provided a wonderful move to the downside!
As traders we always have two choices, the first one is to fall in love with our analysis and try to convince the market and expect the price to move in the direction as per our wish. The second one is to follow the facts that the market provides us and make the right actions according to that. As you know the first option won’t help us and as you can see in the example above what happened when we followed the facts that the market hinted to us and took the right action according to that.
For similar trade ideas and much more I invite you to
Also, you can get one of our strategies free of charge. You will find all the details here
Download our best forex indicators here
If you have any further questions, don’t hesitate to drop a comment below!
Happy Trading!
Arvinth Akash
Home Trader Club Team.
