The CAD/JPY pair has been rejected by daily resistance, and the spotlight is now on the downside.
Bears in the CAD/JPY are now looking for a continuation of the downtrend.
As previously stated, CAD/JPY Price Analysis: The price did indeed correct to the targetted area, as follows: Bulls target a deep correction, and the price did indeed correct to the targetted area, as follows:
Set-up for a trade on the hourly chart
Bulls can target the daily liquidity area near 90.00, with an entry protected by the bullish structure below the corrective lows, 89.403. For a 1:2 risk to reward high probability set-up, on a retest of the support structure, 89.59 accounting for a 2 pip spread, bulls can target the daily liquidity area near 90.00, with an entry protected by the bullish structure below the corrective lows, 89.403.
However, the market has already retested support on an hourly basis, raising the possibility that the horse has already bolted (but buying at resistance is never a favourable strategy).
With that said, a lower risk entry from the 10 EMA on a smaller time frame, such as the 15-min chart, and supposed support structure is also an option for those on raw spreads (or taken at market if factoring in the spread):
To preserve a 1:2 R/R in this scenario, the stop loss would need to be pushed higher, below the secondary structure.
Following the negative impulse from the highs, the price is starting to correct on an hourly basis.
This increases the chances of a downside continuation once the correction is complete.
Bears can now look for bearish structure to short from about 89.80, which is the 38.2 percent Fibonacci retracement confluence region.
On a daily basis, now that the market has picked up liquidity from the daily resistance structure, there is also the possibility of a negative continuation:/n
