By: John Ursus
Timeframe: W1
Recommendation: Short Position
Entry Zone: 97.00 – 99.00
Take Profit Zone: 90.00 – 92.00
Stop Loss Zone: 100.00 – 101.00
The CADJPY is currently in a longer sideways trend after a strong rally which lasted over 12 trading months while the sideways trend has been ongoing for 17 trading months. The rally took this currency pair from an intra-day low of 74.39 to an intra-day high of 101.03 from where the sideway trend developed. This currency has tested its most recent resistance level three times and is expected to trade back down into its next support level.
Forex traders should watch out for the 61.8 Fibonacci Retracement Level which will provide a strong resistance level for any further move higher in the CADJPY currency pair. The 61.8 FRL is merging with resistance and further invites bearish pressures to form. Forex traders should consider splitting their lot size into multiple entry positions across between 97.00 and 99.00 over a 200 pips range in order to decrease the risk on this trade. The upward potential appears to be rather limited while the downside potential remains very attractive.
