CADJPY buyers have done it.
We’ve been waiting for a daily close above 83.20 since the pair rebounded from 82.50 support earlier this month.
The 83.20 region is also one I pointed out when CADJPY broke higher on the 11th and retested 81.80 as new support.
I was able to get long the pair on that retest of 81.80, as I mentioned in the October 14 member’s only video.
Now that CADJPY is above 83.20, the area should begin to serve as support.
Of course, that does not mean it will attract buyers and push prices higher.
Remember that everything in trading is based on probabilities. There is no guarantee that CADJPY or any pair will move in a particular direction.
However, as long as the pair is above 83.20 on a daily closing basis, I do favor longs for a move toward the next key resistance at 84.20.
Notice how 84.20 acted as resistance in mid-April.
The same area attracted buyers in early December of last year.
Keep in mind too that the inverse head and shoulders pattern I mentioned in the October 12 Forex forecast video is still in play.
Given the 400 pip height of the reversal pattern, we shouldn’t rule out an eventual move to the objective at 85.20/50.
That area also lines up with descending channel resistance from January 2018.
So for now, key resistance comes in at 84.20 and 85.20/50.
That’s the case as long as CADJPY is above 83.20.
Alternatively, a daily close (using New York close charts) below 83.20 would signal weakness, in my opinion.
It would also hint at a rotation lower, perhaps into 82.50.
But as long as CADJPY is carving higher lows and higher highs, I have to favor the long side of the trade.
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