Hi Traders! CADJPY technical analysis and short term forecast post is here. The way I would like to analyze the chart for setups is based on multi-timeframe confirmations because in my POV if we get more evidences on different timeframes for the same direction then it makes the setup much more reliable. 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! Let’s start our analysis from the highest timeframe which will be the H4 chart here.
On the H4 chart, the price which was moving lower reached a key support zone formed by the 61.8% (107.721) Fibonacci expansion level of the first wave. The price respected this zone and then it moved higher and has broken above the most recent downtrend line, which we may consider as evidence of bullish pressure. Currently, it looks like a pullback is happening and in addition to this, the ADX indicator gave a bullish signal here at the cross of +DI (green line) versus -DI (red line) and the main signal line (silver line) reads value over 25, we may consider this as yet another evidence of bullish pressure. Also, currently there are no signs opposing this bullish view. So everything looks good here for the bulls and we may now move down to lower timeframe and look for evidence supporting this short-term bullish view.
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 H4(4 Hours) Chart Analysis
CADJPY H1(1 Hour) Chart Analysis
It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this short-term buy setup then you can use any setup and strategy that you have in your arsenal to look for bullish moves and join this buy trade.
Also, don’t forget to protect your buy trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.
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Arvinth Akash
Home Trader Club Team
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