Weekly Trading Signal: CADJPY

CADJPY: SELL

There is a valid indication to go short on the CADJPY market as the analysis below shows. This cross was formerly in a long-term bullish trend (something that started last year). With this bullish trend, it was noted that the bulls are running out of the energy needed to force further bullish run. This fact became conspicuous especially last week when the price failed to go higher than the supply zone at 94.00. It can even be said that the cross consolidated for most part of the last week. This week, the market opened with a gap-down, followed by a rally that was soon halted again at the supply zone of 93.50, before the price began to nosedive gradually. This is a bias that is expected to continue: the price has closed below the EMA 56, and the RSI period 14 has gone below the level 50. One may set a target around the demand zone of 86.56. The stop is put at the supply zone of 94.56. If the price violates this supply zone to the upside, then the scenario outlined here would be invalid. The main aim is not to attain a home run, but to drive home the value of diligence while awaiting a systematic signal prior to opening of a trade.

Chart: 4 hour

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