CAD/JPY Price Analysis: Bears seeking a 1:2 R/R on CAD weakness
- CAD/JPY bears are off to the races, taking on bullish commitments for a 1:2 R/R opportunity.
- CAD is on the back-foot in Asia and is offering day-trading opportunities.
CAD/JPY has been under pressure as the yen catches a safe-haven bid and the CAD slides along with the dollar bloc on USD strength.
The following is a day trading scenario that offers a 1:2 risk to reward on a sell limit order with a stop-loss protected by resistance structure.
Hourly chart
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As can be seen, the price has deteriorated following a correction to the 61.8% of the hourly-impulse.
This gives rise to a trade setup that can be administered from the 15-min chart as follows:
15-min chart setup
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With the price below the 21-moving average, bears can place a sell limit at an optimal entry point to offer enough room for a stop-loss to be placed behind the structure.
The target can be determined by the Fibonacci extension levels as the price moves down the hourly wick towards support where bullish commitments will be challenged by the bears.
Update: Breakeven achieved
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Author
Ross J Burland
FXStreet
Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.
