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#CADJPY has been highlighted by our strength and weakness table due to the recent weakness in the #CanadianDollar. This could provide opportunities to short the currency.
The weekly close on CADJPY is showing signs of buying exhaustion which could lead to a reversal.
Watch the video to learn more…
Today, we’ll be going over CAD/JPY as we could see a reversal soon.
The strength and weakness chart allured me to this chart. I like that the CA Dollar lost significant strength last week, which is making me want to look for potential short opportunities.
I also found it interesting that the JP Yen moved from this five, heading higher only one place. But, is that a sign of what’s potentially to come in the market?
The strength and weakness chart is showing us signs of a reversal. As the CA Dollar was one of the weakest currencies last week, the JP Yen found some strength. This could mean that we are getting a reversal to the CAD/JPY market.
Weekly timeframe
So, I thought I’d jump over to a CAD/JPY chart. In the weekly timeframe, the price is in a healthy uptrend. The market is making clear higher highs and higher lows.
If we’re looking for a CAD/JPY short, it would mean a phase two retracement phase.
If we get a retracement phase on this weekly timeframe, I’d expect to see the price try and retest this structure support. I’d also expect to see a four-hour downtrend forming because when we usually look at an impulse and a retracement leg on the weekly timeframe, the four-hour is trending between those.
The weekly timeframe is in a clear uptrend with the price making higher highs and higher lows. However, the currency pair could form a retracement phase on this timeframe. If that is the case, we should see an opportunity to trade a four-hour downtrend. We can also see that last week’s candle formed a doji, showing indecision and potential exhaustion of the trend.
We got a Doji candlestick last week, which showed indecision at the top of this area. We’ve got a slow down in the candlesticks, and it’s pointing towards a bearish CAD/JPY move. The previous structure highs are at 88. I’m just going to mark the highs and the lows now.
Four-hour timeframe
I’m going to mark last week’s low in the four-hour timeframe.
If you press CTRL+Y, you can see your sessions. I’m expecting the price to move to the downside, and I’m expecting this weekly low to break and continue the trend down.
We had an impulse down, and now we’re correcting within what looks like a triangle pattern forming with the breakout.
An early indication is suggesting that we go short on this move on this trendline support.
If the price closed below on the four-hour, it could be an opportunity to get short. The target could be the weekly low. However, if the weekly low gets taken out, this could be a good opportunity to look for some downside to the market.
Going down to the four-hour timeframe, we highlighted the weekly low and high as these will be important for short opportunities. If the price breaks the weekly low, we should see the trend continue down to the support of 88.01.
In the past, there have been a lot of times where the market broke the high and low, then had further upside.
For instance, the market broke the high down there, and we saw a move to the upside. When it broke the high again, the market continued to move to the upside. Again, the high was there, then the market continued up. However, the market didn’t close above the high this time. Instead, we had a false break out of the weekly high then the market changed trend. Now, we’re looking at the weekly low because we’re expecting the price to move to the downside.
So, keep an eye on CAD/JPY. This is what I’ve got looking at this particular market. Hopefully, we see a breakdown, then we can get some short opportunities on the go.
If you’d like to try trading the CAD/JPY currency pair, you can start with at least $100 when you create a live account with us. Our customer support team will be there to support you every step of the way.
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