CADJPY Knocking on the Door of Confluent Resistance

by Justin Bennett  · 

March 30, 2016

by Justin Bennett  · 

March 30, 2016

by Justin Bennett  · 

March 30, 2016

CADJPY is currently trading 40 pips below one of the most impressive levels since the wedge break last November. In fact, there are three compelling reasons why the 87 handle won’t go down without a fight.

First, it’s the 2016 opening price. The first trading day of this year opened at 86.96 and has remained the 2016 high except for a brief period on February 1st when the pair traded to 87.03 before quickly reversing.

The very same February high is the second reason the 87 level commands attention. The month of January closed at 86.65 and February opened at 86.80.

Last but not least, descending channel resistance that extends from the 2015 high intersects with this area. You may have noticed this pattern in the latter half of yesterday’s lesson.

Here is what it looks like when we put it all together.

CADJPY confluent resistance level on the daily chart

While a resistance area with this much confluence begs for a sell order, yesterday’s session was anything but weak which leaves the door wide open going into the final 48 hours of trade.

This uncertainty has kept me on the sidelines, waiting for confirming price action to justify an entry one way or the other.

A close above 87.00 would open the door for a retest of the September 2015 lows at 88.85 while a bearish pin bar from current levels would have the 85.00 area in its sights.

And if you’re wondering what catalyst might tip the scale, Canada’s GDP print at 8:30 am EST could do the trick.

Want to see how we are trading this setup? Click here to get lifetime access.

CADJPY daily support and resistance levels

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