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CADJPY has reached a confluence of resistance at 83.80.
I mentioned this area on January 29th. It’s the intersection of ascending channel resistance and a former horizontal support level.
The latter served as support between August and December of last year.
With CADJPY now retesting 83.80 resistance, we could start to see an influx of selling pressure.
However, there isn’t any indication that sellers are back in control, at least not yet.
Without a price action signal such as a pin bar, it’s difficult to tell how many offers there are just above the 83.80 handle.
That said, as long as CADJPY is below the 83.80 to 84.00 area on a daily closing basis, the pair is vulnerable.
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If we do get a turn lower, expect to see buyers step in at channel support near 82.70.
It’s going to take a close below channel support to open up downside targets including 80.55 and perhaps 78.70.
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Alternatively, a daily close above 83.80 – 84.00 could expose former (ascending) channel support that extends from the 2018 low.
Those who were following me in November and December of last year will remember the short setup that materialized from that larger channel.
For now, selling CADJPY at 83.80 without bearish price action is a bit risky in my opinion.
The better option might be to either wait for a pin bar from 83.80 or a daily close below channel support near 82.70.
Until then, I will assume that buyers remain in control.
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.Read more...
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