CAD/JPY is still trading in a bearish path as a short position is indicated as the main scenario if rejection in the supply zone happens.
Hi fellow traders! CAD/JPY traded weak on Wednesday (23/November). The bearish sentiment attached to this pair suppressed the price further. Therefore, a short opportunity is still the main scenario this time as you wait for a short signal in the supply zone.
Analysis and Recommendation
Let's take a look at the following CAD/JPY H4 chart below:
Based on the H4 chart above, it has been pointed out that CAD/JPY is continuing its weakening toward the psychological level of 103.00. But before that, try to observe the supply zone around 104.00 – 104.64, which is likely to be tested in the near future. This is because this zone has the potential to trigger further weakness when there is a confirmed rejection.
Be aware if it turns out that there is no confirmed rejection signal. On condition that the price has crossed through 104.64, then CAD/JPY is expected to continue rising toward the higher supply zone in the 105.96 – 106.80 area.
- Therefore, set a short position at 104.00 when the price manages to enter the supply zone and there is a bearish signal confirming it. Stop loss may be positioned at 104.64, while the profit target on 102.40.
- Alternatively, set a long position at 104.64 when there is a significant breakout signal confirming it. Stop loss may be positioned at 104.00, while the profit target on 105.96.
Keep in mind to always use risk and money management before trading! In addition, to make use of trailing stops, don't forget to exit the market as soon as you find a reversal signal!
CAD/JPY key levels:
- Resistance: 106.80, 105.96, 104.64, 104.00
- Support: 103.00 (psychological level), 102.40