CADJPY, Daily
CADJPY has been falling over the last three days as there haven’t been bidders for the crude oil while problems with the Chinese stock market (limit down again today) have caused the traditional safe havens, such as Japanese Yen and Gold market to rally.
This sudden increase of volatility in the CADJPY pair opens up opportunities for both intraday and swing traders. Yesterday price fell below March 2012 pivotal support at 85 area and allowed the price to move to current levels of 83.20 where a small range (82.40 – 83.00) from November 2012 has been providing some support. In the daily picture the pair is trading below a 2 standard deviation regression channel which suggests that the move is overdone on the downside. Stochastics (7) and RSI (7) are deeply oversold as well. Nearest important support and resistance level are at 81.38 and 86.38 while the nearest Fibonacci retracement level (23.6%) that coincides with market pivots is at 87.32.
With the market being oversold in several meters and resting at this 82.40 – 83.00 range (from November 2012) a probability of market correcting higher has increased. Though, at the time of writing there is no indication in the lower time frame charts that price would in fact do that yet. We are however preparing for short trades at resistance levels in case such a rally would take place. Based on intraday charts there are two levels of interest for those looking to participate in the short side. The nearest one is at 83.93 while the next one is a zone reaching from 84.80 to 85.16. We look for short entry signals at these levels as per teachings in my webinars. Targets are 82.46 (T1) and 81.38 (T2).
Janne Muta
Chief Market Analyst
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About Janne Muta, HotForex’s Chief Market Analyst
Janne Muta is a seasoned industry professional with over 16 years experience in the global markets. Originally from Finland, Janne has worked for institutions in both Helsinki and London as an institutional fund manager, global market analyst and FX educator.
Traders and fund managers from around the world have benefited greatly from Janne’s technical analysis methods. The indicators and price action based trading models he has developed, have, after rigorous testing, proven to be invaluable in identifying high probability trades.
“My mission is to help you to become a confident and successful trader”
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