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.
Comment
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Similar to this setup as well:
Comment
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So far, a rebound in CAD, 91.600 remains unbroken. No entry orders yet.
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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.
Trade active
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CADJPY Short triggered via Sell Stop at 91.500. The waiting game begins.
Trade closed: stop reached
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Closed trade at around BE and reversed position for a Long that took profit at 92.200.