Hi Traders! CADJPY short term forecast follow up and update is here. On August 4th I shared this “Technical Analysis – CADJPY 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
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 a correction is happening. Also we had two strong support zones and the price which was moving lower has broken below these zones and holding below them. Currently these two strong support zones are acting as two strong resistance zones for us. Until both these resistance zones 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 until the two strong resistance zones hold I was expecting the price to move lower further. The price action didn’t follow my analysis here and this idea failed. The price which was moving higher reached the second strong resistance zone but the price didn’t hold in this zone as I expected it to. The price then moved higher further and we got a valid breakout above the second strong resistance zone thus invalidating this short term bearish view. My current view on this pair is neutral.
So traders, this is why I wanted to show this example to help you understand why we should always trade based on the facts and hints provided by the market and take the right actions according to that. Even though we had various facts supporting the bearish view here, the price didn’t hold in the two resistance zones as I expected it to and broke above them, which is a contradictory sign provided by the market opposing the bearish view. Also, you should keep in mind that losses are part of trading we can’t expect every trade to go as per our plan and provide us profits. In trading, we can’t avoid losses but in order to be successful in trading, we should know how to cut losses early and how to manage the trade when the price goes in the opposite direction.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team.
