CAD/JPY Price Analysis: Bears setting up to target the 79 area

Developing story

CAD/JPY is technically bearish from both a daily and 4-hour perspective which gives rise to a bearish analysis and trade setup in the following charts.

From the daily chart, a classic 1,2,3 impulse, correction and impulse is being displayed with the price in the throes of wave 3 to the downside.

This gives rise to a trade entry setup on the lower time frames as illustrated below. 

Daily chart

4HR chart

On the four-hour time frame, the sell limit can be placed at the structure that has a confluence with a 38.2% Fibonacci retracement of the latest bearish impulse which has started to correct. 

In doing so, with a conservative stop loss placed above structure/resistance, there is a 1:3 risk to reward if seeking the point of control since late May's rally.

This is a level that coincides with the early August support structure.

An alternative way to approach the market would be for an equal risk to reward ratio with a stop loss brought in to 80.58 and to target to only 79.50.

The price action will be monitored from a 4-hour analysis and updates will follow if the sell stop level is achieved with a view to breakeven at the first structural opportunity. 

Update: Sell limit filled

Update: Breakeven achieved

The price moved to create a lower low following entry which has enabled the stop loss to be moved to breakeven.

The story will continue in a new article as the price action and trade develops, updated on 4-hour time frames. 

A link to the news flow will be posted here shortly.

Target achieved for 3R profit