Hi Traders! Today’s post is about CADJPY short term forecast and technical analysis. As I do with every technical analysis post, multi-time frame analysis method will be applied in order to look for all the possible evidences that supports my view on the current trading timeframe and the higher timeframe. We will start our analysis from the highest timeframe now which will be the H4 chart here.
CADJPY H4 (4 Hours) Chart Analysis – Range, Bearish Divergence, Stochastic Oscillator
On the H4 chart the price is moving inside a range which started on 9th March 2020, this range is formed by the highs and lows reaching parallel resistance and support zones. The price which is respecting this range so far has currently reached the top of it, if we didn’t get a valid breakout here we may then expect the price to respect this resistance level and move lower again. In addition to this we also have a bearish divergence that has formed between the first high at 77.784 and the second high at 77.964 based on the MACD histogram indicator and also the Stochastic Oscillator has reached its extreme, we may consider these as evidences of bearish pressure. We may now move down to one timeframe lower and see if we have evidences supporting this bearish view.
CADJPY H1(1 Hour) Chart Analysis – Bearish Divergence, Parabolic Sar, Two Possible Scenarios
On the H1 chart we have a bearish divergence that has formed between the first high at 77.272 and the second high at 77.964 based on the moving averages of the MACD indicator which we may consider as an evidence of bearish pressure. Also based on the Parabolic Sar the dots are above the price which we may consider as another evidence of bearish pressure. We have two possible scenarios here:
We have a good uptrend line that has formed and the price is respecting it so far, if we get a valid breakout below this uptrend line, we may then look for retraces and then possible continuation lower.
Alternatively if the price moves higher then then next area to look for bearish evidences for potential continuation lower would be the sell zone (marked in blue rectangle) which is formed by the top of the H4 range and the 61.8% fibonacci expansion level at 78.406 of the first wave we have.
Technical Analysis & Forecast Summary
CADJPY H4 (4 Hours) Chart Analysis
- Range, Bearish Divergence, Stochastic Oscillator
CADJPY H1(1 Hour) Chart Analysis
- Bearish Divergence, Parabolic Sar, Two Possible Scenarios
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