Hi Traders! CADJPY short term forecast and technical analysis 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, currently we have a bearish momentum and while measuring the first and second wave using the Fibonacci expansion tool, the 161.8%(85.007) Fibonacci expansion level of the first wave and the 61.8%(85.153) Fibonacci expansion level of the second wave coincides on the same zone, which makes this area a key support zone for us. Price still has room lower towards this key support zone and currently there are no signs opposing this short term bearish view. 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 evidence of bearish pressure. We may now move down to lower timeframe and look for evidences supporting this bearish view.
On the H4 chart, we have a bearish divergence that has formed between the first high that has formed at 88.038 and the second high that has formed at 88.290 based on the MACD indicator. The price then moved lower and broke below the last low at 87.054 thus forming a classical setup of bearish divergence followed by bearish convergence, we may consider this as evidence of bearish pressure. As per the book scenario after a bearish convergence we may expect corrections and then further continuation lower. Currently it looks like a correction is happening. In addition to this, the price has also broken below the most recent uptrend line which we may consider as another evidence of bearish pressure. Also, the ADX indicator gave a bearish signal here as well 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 and we may now move down to one more timeframe lower and look for evidences supporting this bearish view.
(Note: You can learn about a Killer Forex Strategy “Double Trend Line Principle” here)
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 D1(Daily) Chart Analysis
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 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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