Anakiin
Short

CADJPY Short Setup after extended bullish run

FX_IDC:CADJPY   Canadian Dollar / Japanese Yen
35 2 3
After an overextended run we have a nice short setup shaping up. Here are the confluence factors:

1) Rejection of 2 Downsloping trendlines (short term and long term trend lines )
2) Deceleration with high test
3) Rejection of Monthly Resistance line at 79.00
4) Rejection of Fib retracement 0.618
5) Rejection of the 50 EMA on daily
6) Stock RSI overbought Area

Lower time frames: MACD Divergence on 1 hr             chart



Hey Anakiin, thanks for sharing :)

I'm a fellow IP student BTW

I'm curious as to how you are entering this - is this an idea, a swing position or an idea that will be taken if the intradays support the idea thesis? I didn't take it (as per my swing trading style) as the daily has a clear Double Bottom with MACD div, and a HH, HL recently. Though it is a nice high confluence setup though - so I can see your reasoning - and nice Reward : Risk there too. Cheers for sharing :)

Also your target intrigues me - Had I taken this, I would've targeted 77.5, the recent swing low. What did you see that made you target 76.750?

Kind regards,

Zachary Ridderhof
Reply
Anakiin ZacharyR14
Hey Zachary!

Thanks for your comment :)

First of all this is an idea as an option to trade during NFP, USD pairs have nice technical setups however due to the high volatility event I rather suggest or share ideas that are a bit less impacted by NFP.

You are right on your analysis however you have to consider that the JPY pairs have rallied hard extensively for a few days and a breathing is necessary to the market to "rebalance". When I see extended run followed by some nice deceleration at key areas of resistance I tend to consider a trade. In this trade there were many key catalysts....there were hard to ignore (Even on a NFP event, considered it is not directly an USD pair).

Regarding the price target I didn't really want to go too much in detail..this is because I want these to be taken as ideas and not as trading signals, cause I don't want to have the responsibility of a losing trade etc. :)

Anyway this is a bit reflecting my personal style...I should have marked Price Target 1 and Price target 2 (sometimes I even have 3 targets). My trading style consists in follow the trade and trail at key points or were i see deceleration at key support areas (like in this case). This follows my strategy..sometimes price action continues toward Price target 2 after consolidation sometimes it bounces. Consider that in this case the 50 ema daily is a very powerful catalyst that has been respected multiple times in the past...and it happens sometimes that I just adjust my stop following the "Wave" of the the EMA.

Hope it helps someway :)
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