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On March 1st I discussed a CADJPY sell signal.
The pair was in the process of carving a bearish rejection candle following a retest of the 84.50 area as new resistance.
In truth, I pointed out this new resistance area back on February 25th.
The March 1st sell signal has performed exceptionally well so far this week. CADJPY is off Monday’s high by 140 pips with no signs of slowing.
However, the pair is fast approaching the first key support at 82.30.
You can see how this area served as a pivot of sorts between January 9th and February 8th. It also supported prices in June of last year.
But while the 82.30 area will likely attract a few buyers, I’m not anticipating a turnaround from here or even a significant bounce.
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I could be wrong, but a move to the April 2017 and March 2018 lows at 80.55 seems to be the more likely outcome.
As always, it will be important to see how CADJPY reacts to 82.30 next week.
I managed a short entry at 85.06 on March 1st which I also announced inside the member’s area.
I’ve since added to the position following the close below short-term support on the 4th.
Keep in mind that Canada reports its employment situation on Friday at 8:30 am EST. The events are sure to trigger an increase in volatility around that time.
In summary, as long as 83.70 resistance is intact, CADJPY is 82.30 bound with a daily close below that exposing 80.55.
Justin Bennett is an internationally recognized Forex trader with 10+ years of experience. He's been interviewed by Stocks & Commodities Magazine as a featured trader for the month and is mentioned weekly by Forex Factory next to publications from CNN and Bloomberg. Justin created Daily Price Action in 2014 and has since grown the monthly readership to over 100,000 Forex traders and has personally mentored more than 3,000 students.
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