CADJPY - POTENTIAL SHORT ENTRY - COULD BECOME LONG TERM TRADEMost of the other YEN pairs have recently declined strongly from earlier in the year which in varying degree are being retraced with some possibly still in progress and others might have just completed.
CADJPY - appears to be such pair that might have completed the retracement and could be in very early stage of resumption of the down trend and potentially offer very good short entry that could turn into significant long term short and possibly very strong dynamic as it could be wave C decline from Dec 2015 high
Here is the Technical summary
(A) From Monthly chart (see chart below) we note that:
1. It topped in Dec 2017 at 125 area we had noticeable sell of creating a low in Jan 2009 at 68.5 in a zigzag decline.
2. It has been retracing since and in Dec 2014 completed 66.67% (2/3rd) which is a Gann retracement level.
3. Hit the resistance at median line of the rising pitchfork.
4. Then made initial drop again that has been retraced to just over 61.8%.
(B) In addition to Monthly we note the following from Daily chart:
1. The retracement of the Feb low at 91.70 area has been a zigzag and has retrace 61.8% of the prior decline.
2. second leg of the zigzag could be potential rising wedge which would suggest move the upside is complete or very close to completion
2. Clear price divergence with both RSI and MACD which has bearish cross over.
This setup could potential offer very profitable trade with stop just above the recent high and entry could be located using 4Hr time frame or say break below 98 as conservative entry.
Downside targets could be:
Target 1 = 85 (previous resistance that could become potential support)
Target 2 = 68 (Previous structure low of Dec 2009)
Target 3 = 52 to 50 being 127.2% extension of the move from 125.40 to 68.32
Warning: This is my interpretation of price action using TA approach that I consider helps me most but could be completely wrong. Therefore as always, do your own analysis for your trade requirement and ignore my views.
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DanV
danv-charting.com
