CADJPY Head and Shoulders Formation - Short 200+ Pip Target
CADJPY has formed an obvious Head and Shoulders pattern on the 4H chart at the resistance level of a descending trend line and also at the horizontal resistance level of 83.650 and currently closed for the weekend on the neckline of the pattern at around 83.400. I am anticipating this pair to fall around 240 pips to 81.000 level where the descending trend line support is, not to mention a psychological level and a key level of support in the past.
Looking at the confluence for this trade, CADJPY has been clearly making lower highs and lower lows recently and is clearly in a definable downtrending channel. It is currently forming a Head and Shoulders pattern after its most recent touch and test of the descending resistance with 3 clearly definable drives to the highlighted area and the blue circles highlighting the H&S formation. The MA and EMA are crossing right as the price is sitting on the neckline.
Fundamentally Canadian Dollar is struggling with trade worries and worries over domestic debt; this lines up perfectly with the technical analysis of the H&S being formed at a resistance level ready for the price to fall within the descending channel to the support level of 81.000.
looking forward to this one. I may adjust my SL slightly depending on how the market opens but overall the SL will be kept very tight as a close above the right shoulder will invalidate the whole set up.
Looking at the confluence for this trade, CADJPY has been clearly making lower highs and lower lows recently and is clearly in a definable downtrending channel. It is currently forming a Head and Shoulders pattern after its most recent touch and test of the descending resistance with 3 clearly definable drives to the highlighted area and the blue circles highlighting the H&S formation. The MA and EMA are crossing right as the price is sitting on the neckline.
Fundamentally Canadian Dollar is struggling with trade worries and worries over domestic debt; this lines up perfectly with the technical analysis of the H&S being formed at a resistance level ready for the price to fall within the descending channel to the support level of 81.000.
looking forward to this one. I may adjust my SL slightly depending on how the market opens but overall the SL will be kept very tight as a close above the right shoulder will invalidate the whole set up.