Hi Traders! CADJPY technical analysis and short term forecast is here. We do our analysis on the MetaTrader4 platform (MT4). Some very interesting, useful tips and hacks about the MT4 platform could be found here. 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! Let’s start our analysis from the highest timeframe which will be the daily chart here.
On the daily chart, the price which was moving higher has created a bearish divergence that has formed between the first high that has formed at 101.858 and the second high that has formed at 107.210 based on the MACD indicator which we may consider as evidence of bearish pressure. After the first move down, currently it looks like a correction is happening. In addition to this, based on the Stochastic Oscillator we could see that the price has reached its extreme which we may consider as yet another evidence of bearish pressure. So everything looks good here for the bears and currently there are no signs opposing this short term bearish view. We may now move down to lower timeframe and look for evidences supporting this short term bearish view.
Looking at the H4 chart, we could see that after the first move down currently it looks like a correction is happening in the form of potential double wave to the upside. Also, we have a bearish divergence that has formed between the first high that has formed at 105.838 and the second high that has formed at 106.232 based on the MACD indicator which we may consider as evidence of bearish pressure. In addition to this, we have this bearish divergence on the RSI indicator as well, which we may consider as yet another evidence of bearish pressure. Until the strong resistance zone (marked in red) shown in the image below holds my short term view remains bearish here. A valid breakout below the most recent uptrend line would be the validation for this short term bearish view.
CADJPY D1(Daily) Chart Analysis
CADJPY H4(4 Hours) 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 sell setup then you can use any setup and strategy that you have in your arsenal to look for bearish moves and join this sell trade.
Also, don’t forget to protect your sell trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team
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