We propose a short position in CAD/JPY, capitalizing on the renewed downtrend. An optimal entry would be near the channel resistance if another uptick occurs – e.g. around ¥104.4 – ¥104.5 (current market around ¥104.36 is already in this zone)
Technical Analysis: CAD/JPY’s technical picture has flipped bearish after a relief rally in April. Not long ago (earlier Q2), the pair formed a double bottom near a key support (around ¥101–102, likely the April low). That drove a rebound to a peak in late April, but the recovery stalled below ¥105. In fact, price failed at ¥104.90, which corresponds to the descending channel resistance on the daily chart.
We propose a short position in CAD/JPY, capitalizing on the renewed downtrend. An optimal entry would be near the channel resistance if another uptick occurs – e.g. around ¥104.4 – ¥104.5 (current market around ¥104.36 is already in this zone). A protective stop can be placed at ¥105.10, just above the recent swing high and the critical 105 handle. This stop is tight enough (about 70 pips risk) to invalidate the setup if hit (as it means a breakout of the bearish channel). The profit targets are ¥102.20 initially (just above the ¥102.9 support and ahead of the big 102 figure) and an extended ¥100.00 on a multi-week horizon if downside momentum persists.
Technical Analysis: CAD/JPY’s technical picture has flipped bearish after a relief rally in April. Not long ago (earlier Q2), the pair formed a double bottom near a key support (around ¥101–102, likely the April low). That drove a rebound to a peak in late April, but the recovery stalled below ¥105. In fact, price failed at ¥104.90, which corresponds to the descending channel resistance on the daily chart.
We propose a short position in CAD/JPY, capitalizing on the renewed downtrend. An optimal entry would be near the channel resistance if another uptick occurs – e.g. around ¥104.4 – ¥104.5 (current market around ¥104.36 is already in this zone). A protective stop can be placed at ¥105.10, just above the recent swing high and the critical 105 handle. This stop is tight enough (about 70 pips risk) to invalidate the setup if hit (as it means a breakout of the bearish channel). The profit targets are ¥102.20 initially (just above the ¥102.9 support and ahead of the big 102 figure) and an extended ¥100.00 on a multi-week horizon if downside momentum persists.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.