CAD/JPY Price Analysis: Upside target done, focus is now on the downside
|- CAD/JPY is rejected from daily resistance and now the focus is on the downside.
- CAD/JPY bears are now lurking for a downside continuation.
As per the prior analysis, CAD/JPY Price Analysis: Bulls target a deep correction, the price indeed corrected to the targetted area as follows:
Prior analysis
Hourly chart, trade set-up
For a 1:2 risk to reward high probability set-up, on a retest of the support structure, 89.59 accounting for a 2 pip spread, bulls can target the daily liquidity area near 90.00, with an entry protected by the bullish structure below the corrective lows, 89.403.
That being said, the price has already retested support on an hourly basis, so there is every chance that the horse may have already bolted, (but buying at resistance is never a favourable strategy).
With that being said, a reduced risk entry from the 10 EMA on a lower time frame, such as the 15-min chart, and presumed support structure is an option also for those on raw spreads (or taken at market if factoring in the spread), (almost certain to be triggered in potential volatility around the Tokyo fix):
In such a scenario, the stop loss would need to be moved higher to below the secondary structure in order to maintain a 1:2 R/R.
Live market analysis, target achieved
Bears seek downside extension
From an hourly perspective, the price is starting to correct following the bearish impulse from the highs.
This raises prospects of a continuation to the downside once the correction has over.
Bears can now monitor for bearish structure from which to short from, potentially from the 38.2% Fibonacci retracement confluence area near 89.80.
From a daily perspective, there is also the probability of a downside continuation now that the price has picked up liquidity from the daily resistance structure:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.