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 H4 chart here.
CADJPY H4(4 Hours) Chart Analysis – Key Resistance Zone, Bearish Hidden Divergence, Uptrend Line Breakout
On the H4 chart, the price which is moving higher has currently reached a key resistance zone, respected it and is bouncing lower from this zone. This key resistance zone is formed by the 61.8%(105.019) Fibonacci expansion level of the first wave. In addition to this, we could see that the price has created a bearish hidden divergence between the first high that has formed at 106.626 and the second high that has formed at 104.574, followed by a continuing bearish divergence between the first high that has formed at 104.574 and the second high that has formed at 105.085 based on the MACD indicator, which we may consider as evidences of bearish pressure. Also, the price which is moving lower has broken below the most recent uptrend line which we may consider as another evidence of bearish pressure. So everything looks good here for the bears and we may now move down to lower timeframe and look for evidences supporting this short term bearish view.
CADJPY H1(1 Hour) Chart Analysis – Bearish Convergence, ADX Indicator
On the H1 chart, we could see that the price which was moving higher has created a bearish divergence between the first high that has formed at 104.954 and the second high that has formed at 105.085 based on the MACD indicator. The price then moved lower and broke below the last low at 104.296 creating lower lows, thus forming a classical setup of bearish divergence followed by bearish convergence, we may consider these as evidences of bearish pressure. Generally, after a bearish convergence we may look for corrections and then further continuation lower. Currently, it looks like a correction is happening. In addition to this, the ADX indicator gave a bearish signal here at the cross of -DI (red line) versus +DI (green line) and the main signal line (silver line) reads value over 25 which we may consider as yet another evidence of bearish pressure. So everything looks good here for the bears. Until the key resistance zone shown in the image below (marked in red) holds, my short term view remains bearish here and I expect the price to move lower further.
Technical Analysis & Forecast Summary
CADJPY H4(4 Hours) Chart Analysis
- Key Resistance Zone, Bearish Hidden Divergence, Uptrend Line Breakout
CADJPY H1(1 Hour) Chart Analysis
- Bearish Convergence, ADX Indicator
Trading Tips
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.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team.
