CAD/JPY: Opportunity for new short positions on the trend

Tool: CAD/JPY
Graphics: H4

The price is in long-term downward trend and in the upper part of the channel, after correction.

Existence of a breakthrough of diagonal support formed during corrective upward movement.

Correction of Fibonacci 23.6%

50SMA under 200SMA - negative signal. The price goes below 50SMA - a negative signal.

Indicators: CCI(14) and CCI(50) intersect 0 from top to bottom - signal for a new downward pulse.

Fundamental: The strong dependence of the Canadian economy on oil prices causes the Canadian dollar to move in correlation with the price of black gold. Over the past two days there has been a sharp drop in oil prices and this had a negative impact on the Canadian dollar. On the other hand, the Japanese yen has been rising over the past few months, against the backdrop of growing geopolitical tensions.

Entry levels can be of two types, aggressive and conservative. The aggressive method will be if we enter now with a short position and the conservative if we wait for a price correction to the pierced diagonal and from there to look for a suitable Price Action for Short.

SL: 82.747

Alternative scenario: if the price cross above diagonal resistances and keep it there for a couple of bars, negative scenario will break, and  we will see a buying above the zone of 23.6% Fibonacci correction.

Jr Trader Petar Milanov

Read more:

• It seems Trump has completely confused Bank Of Canada’s plans
• The currencies of the countries with the biggest GDP improvement rally – CAD, NOK, SEK
• Hedge Funds Wager Loonie Rally Has Legs as Market Turns Bullish
• CAD: The currency is to strengthened even more, with looming BoC meeting
• Massive CAD short Squeeze as investors turn neutral on USD