- 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:
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:
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