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CADJPY Reacts to Channel Support at 84.70

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Back on October 29th, I discussed a pattern on CADJPY that could produce a 400-pip move.

At the time, the pair was trading at 85.80 or about 80 pips above today’s price.

The ascending channel from the year-to-date low at 80.50 is what caught my attention.

It outlined a short-term uptrend. But the implications from that channel were and still are quite bearish.

The reason for that has to do with the year-to-date high. CADJPY carved the current 2018 high at 91.58 in early January.

Now compare that to the most recent swing high in early October.

Buyers only managed to reach 89.20 before losing steam on October 4th. 

In fact, CADJPY fell off a cliff between the 4th and 10th of October losing more than 300 pips in a few short days.

That means CADJPY has carved a lower high so far this year. And by the look of things, the bearish price action isn’t over.

In my opinion, sellers are just getting warmed up. The real opportunity will materialize following a daily close below channel support.

It’s what I mentioned on October 29th, and I stand by those comments.

Here’s what I wrote three weeks ago:

The ascending channel you see below could present an opportunity for those with a more bearish outlook for CADJPY. The short-term uptrend will remain intact while above channel support, but a close below it would open up downside targets.

As of this writing, channel support comes in at 84.70. We can already see how buyers stepped in earlier today.

But I’m not interested in buying CADJPY.

Instead, I’m going to wait to see if sellers can secure a daily close below that 84.70 area.

If they do, it will expose the August and September lows at 83.90. A daily close below that would take CADJPY to 82.30.

The final resting place following a break below channel support could be the year-to-date low at 80.50.

Keep in mind, however, that such a move will take weeks if not months to play out.

IMPORTANT: I use New York close charts so that each day closes at 5 pm EST.

CADJPY ascending channel on daily chart

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16 comments
Morero says

I am little bit confuse or just because I joined you later but I will do research and do some analysis thanks….. Justin

Reply
    Justin Bennett says

    You’re welcome.

    Reply
Aseza says

Wow, So this why I got stoped out when I tried to buy. Thanks Justin, Will be ready to fire if we close under 84.70

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Mimi says

Much appreciated and started selling at 85.90. Great analysis as always!

Reply
    Justin Bennett says

    Cheers, Mimi.

    Reply
olanrewaju says

i sold cad jpy based on the head and shoulders pattern on the daily time frame and the bearish pin bar on 24th October.I also relied on Justin’s bearish bias .I however foolishly closed my trade because of the H4 bullish noise on 15th November.Now am so angry with myself

Reply
    Nel says

    Patience is a virtue

    Reply
    laide says

    cases like that i reduce my position significantly . still bearish though but looking to add below

    Reply
Simba says

I am already in it selling!

Reply
    Anele says

    Jumping the gun.don’t get your fingers burned

    Reply
OGBORO preciouslife says

Let’s watch

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Sakky says

I have leant a lot from Justin , to trade what I see not I think I can see as you always say. It works and I really appreciate for your effort. GBPJPY also complies to your strategy . It controls the market

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Johns Paly says

After hitting 84.7 and a daily close at 84.604 on 20 NOV, our man has retraced and was heavily bullish for the last two days.. Have entered a short based on the close below the channel support, but now bleeding. Hope the price will hit a major resistance soon and will start coming down. your sage advice, pls…

Reply
Johns Paly says

The price has started coming down from today..Hope the slide will continue, Waiting for your sage advice…

Reply
    Justin Bennett says

    There’s no need to hope. Just let the market do its thing.

    Reply
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