JeffKip
Short

CADJPY Bearish Probability | H&S Pattern

FX:CADJPY   Canadian Dollar/Japanese Yen
a year ago
Technical Analysis:
  • A small Head and Shoulders Pattern is evident on the chart. A break of 91.600 exposes the first target at 90.700.
  • 93.00 has of late proved to be quite the Resistance Level as the pair failed to achieve a daily close above this handle with two notable failed attempts on the 9th and 12th of October daily candles.
  • It is important to note that this area of price rejection (~93.30) also happens to accommodate the 61.8 % Fibonacci Retracement Level (light blue on chart) drawn from the 97.00 high and 87.40 low. In addition, 92.60 flaunts the 38.2% Fibonacci Retracement Level drawn from the 97.00 high and 87.40 low. This level of Fibonacci confluence, that occurs in an area of structural resistance that has been relatively well-respected, increases the probabilities of a move lower, given the right conditions.
  • With no higher highs in place the pair is still in a downtrend, albeit ranging as it is sandwiched between the 93.00 Resistance and 91.600 Support as indicated in the chart. Therefore a break, close and price action/fundamental follow-through below 91.600 is what I'm timing and watching for. Stops at 92.00.
  • If the Weekly Candle closes as a bearish one, a noteworthy Evening Star will be in place. This is usually a Bearish Indicator.

Fundamental Analysis:
  • OIL Prices heavily influence the Canadian Dollar             . The guys over at CFDTrading tackle the recent devaluation here. It's a short YouTube video.
  • Therefore recent OIL             prices devaluation, Canada's seemingly recessive economy and risk aversion vibes (stronger JPY) are all factors that may contribute to a weaker CAD.
  • As much as Canadian economic data has been improving, there are still inconsistencies with the pattern. Some have been misses and some have been 'good'.

Key Risks:
  • The Bank of Japan is relatively more dovish than the Bank of Canada, this difference could work in favor of the CAD.
  • A rebound in OIL             prices and/or Canadian Economic Data will see a correlative rise in the CAD.
a year ago
Comment: Similar to this setup as well:
https://www.tradingview.com/chart/CADJPY/jI3ccUWr-CADJPY-Perfect-Example-of-a-Structure-Based-TCT-Opportunity/#tc242913
a year ago
Comment: So far, a rebound in CAD, 91.600 remains unbroken. No entry orders yet.
a year ago
Comment: As expected, 92.500 held as resistance. The boost was due to Canadian Elections.
I will wait for a daily close before building into Short Positions.
a year ago
Trade active: CADJPY Short triggered via Sell Stop at 91.500.
The waiting game begins.
a year ago
Trade closed: stop reached: Closed trade at around BE and reversed position for a Long that took profit at 92.200.
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