FX Market Analysis – CADJPY

*Live market analysis of the CADJPY FX currency pair!*

Here is another live market analysis blog post for you to see what instruments are on my watchlist that I am looking to trade soon. I will keep this one short and sweet because we have some glorious weather here in the UK and I am about to head out to the golf course.

CADJPY is a currency pair that I don’t often trade but when I do trade it, I tend to have quite good success. I think this is partly due to the lack of frequency in trading it and therefore I am more patient with my set ups.

Lets look at the daily timeframe chart first.

CADJPY daily timeframe chart

Price is forming a clear descending channel on the daily/weekly timeframe charts so my instant bias is bearish. This therefore means I will be onside with the lower highs and lows of the trend and get help from the momentum of the prevailing higher timeframe trend.

I have applied the fibonacci retracement tool to the recent weekly swing points of the descending channel and as you can see, price has rejected the 0.618 retracement level which resides just below the top trendline of the channel. I have marked on a nice intraday liquidity zone with the blue line which sits at 82.800. Right away, it is possible to simple short CADJPY on the closure of a daily rejection candle but as always, I like to drop to the lower timeframes to get a more accurate and better reward:risk ratio positon.

Below is the 4hr timeframe chart.

CADJPY 4 hour timeframe chart

I am not sure if I have previously explained the theory behind using inverse fibonacci levels but by applying the tool to the lower timeframe counter trend you can use the extension levels as an extra confluence. As you can see on the chart above, the counter trend fib -0.27 extension sits right in the zone where our larger timeframe fib 0.618 retracement level is along with the bearish TL and resistance zone at 82.800.

I have also marked on the wick candles with little black arrows to show you where there are clear rejections of this zone which shows sellers are definitely present.

CADJPY 1 hour timeframe chart

And finally, the 1hr timeframe chart shows my ideal entry which is now. The 1hr candle has closed with a nice bearish wick rejection of the 0.618/0.786 fibonacci retracement levels of this last pullback. This gives me a good indication that a lower high will now be formed and price will break to the downside to hopefully break that intraday bullish trendline I have marked on.

Stop loss placement is key and this is why I have my SL marked on above the resistance zone at 82.800 to avoid any further retests of that zone.

If we are to use the daily timeframe chart for potential long term profit targets then I would aim for the 79.00 price level. This is where the lower trendline and fibonacci -0.27 extension level meet for this next bearish wave to be complete. If this was to happen then this trade would be close to 12R before any scale in positions are added.

Thanks for reading and as always, you can track this trade live on there TradingView platform by clicking on the link below.

https://uk.tradingview.com/chart/CADJPY/CKRlroKc-CADJPY-Short-Trade-SWING-TRADE/

Have a good rest of the week and don’t forget to LIKE, SHARE and FOLLOW my blog to stay up to date with the latest posts and analysis 🙂

DISCLAIMER: None of the information posted on this site is to be considered investment/financial advice. Trading is high risk and you should only trade with money you can afford to lose.

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