FX Market Analysis – CADJPY October ’19

*Technical analysis with a breakdown of my current intraday position on the CADJPY FX currency pair*

This blog post contains my full technical analysis breakdown of the CADJPY FX currency pair and I will show you my current intraday short position on the pair. In the spirit of my current blog content, this trade entry and analysis revolves around the trendline break strategy I have spoken about a lot.

Let’s first look at the daily timeframe chart because it sets my expectations for the position.

CADJPY daily timeframe chart

Price has climbed over 500 pips since the end of August 2019 with the daily 50EMA and weekly 50EMA broken and price now sat above them. New higher highs were made this week and the daily trend does now look firmly bullish.

However, I have been monitoring the current price action on the 1hr timeframe chart and it is definitely looking over extended and ready for another pullback in to the higher timeframe buy zones. I have marked up the daily chart above with my key areas of interest over the next few days/weeks.

Firstly is the daily bullish trendline which can now be drawn using the previous two lows. I have applied the fibonacci retracement level tool to the last bullish wave and the counter trendline from the last pullback. All of these point to a nice buy zone at the 81.200 zone. So this is my main target for short positions on CADJPY.

However, because the daily trend is bullish, I will be consciously watching for any new support zones that may form. The probability of another higher low forming is greater than price breaking down further than previous lows.

CADJPY 1 hour timeframe chart
(My short position)

As I said previously, I am currently holding a short position on CADJPY. I have shorted this morning based on the nice multiple rejections of the 1hr 50 EMA and todays small price resistance zone at 83.250. I have kept my stop loss order way above the daily pivot level and previous 1hr support and will look to close my position if price breaks upwards above these levels.

My plan is to sell CADJPY down to my daily buy zone at 81.250 where I will look to take profits and/or go long to take advantage of the higher timeframe trend. This is dependent on price action at the time and whether price does find support in that zone.

CADJPY 1 hour timeframe chart forecast

The chart above shows my forecast of what might happen over the net few days/weeks. Price firstly needs to great a lower high now and break todays support at 83.000. Then I can begin to look for small price pullbacks through the following days to continue to add short exposure on this FX pair.

Contingency Plan:

If price breaks upwards from here and this lower timeframe breakout becomes a false one then I will close my short positions. I am not interested in trying to continue to sell something that is still climbing in price.

Price could fall from here down to my target profit zone with no significant pullbacks which is fine. I will not scale in to this trade unless price does make some lower highs as these provide the best discounted selling opportunities. Never sell the lows.

Links:

If you haven’t read my previous blog posts on trend reversal trading and using the trendline break set up then click on the links below.

https://diaryofafinancekid.com/2019/10/21/trading-strategy-the-trendline-break/

https://diaryofafinancekid.com/2019/10/28/trendline-breaks-continued/

If you are wanting to change brokers to get the best possible execution prices and lowest spread fees then take a look at IC Markets. Their link is below.

https://www.icmarkets.com/?camp=38537

Thanks for reading and please dot 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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