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CADJPY has worked out well for us so far this year.
It all started when the pair was approaching former channel support as new resistance at 84.50. You can see that commentary here.
The Canadian dollar cross then carved a sell signal on March 1st.
That bearish candle triggered a 170-pip loss over the next five sessions.
However, on March 8th, CADJPY reached the first key support area at 82.30/40.
Since then, the pair has regained 150 pips of the 280 pips lost since the pair carved a year-to-date high on March 1st.
You may notice that this recovery is about half of the recent losses.
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In fact, the 50% level of the range between the year-to-date high at 85.23 to the March 8th low at 82.41 comes in at 83.80.
You can also see how 83.80 served as resistance during the first half of February.
And if you go back to the second half of 2018, you’ll notice that 83.80 acted as support in August, September, and December.
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So will CADJPY selloff from the 83.80 area?
That’s yet to be seen. But the 83.80 resistance zone is sellers’ best chance of extending the decline that began earlier this month.
A move lower from here would target 82.40 with a close below that exposing 80.55.
Alternatively, a daily close above 83.80 would re-expose former channel support (new resistance) near 84.80.
At this point, it’s probably best to see what today’s session produces in terms of a sell signal.
And that means waiting for the 5 pm EST close before acting. Anything else is too speculative for my liking.
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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