Good morning Forex Kings,
Today we are looking at the CADJPY which has now reached a major resistance level.
The JPY appears to be over sold against numerous currencies after the de-escalation of the Iran and US tensions.
We are now focusing on the Trade War agreement between the US and China, as well as the earnings season for US corporations.
The market is extremely bullish at the moment with the US stock market reaching record highs, however the details of the trade deal are being kept under wraps.
We will be looking to trade the CADJPY with a double trade set up. We could see some devaluation of the CAD as oil prices are now falling from its major highs seen last week.
CADJPY 4 Hour Candles
A couple of technical patterns to watch out for here. Firstly, the resistance of 84.30 is the 161.8% FIB extension which is considered to be a major resistance zone. Secondly, the 84.30 level appears to be a long term neck line of an inverted head and shoulders pattern. A break above the neck line before creating a right shoulder would invalidate the inverted head and shoulders pattern.
The next major resistance level is at 85.00 which will be our second entry.
82.00 is the key level to watch for.
Trade set up 1: SELL – Market order (Current Price 84.25), stop loss set at 85.50, take profit 82.00.
Stop loss: 125 PIPS
Take Profit: 225 PIPS
Trade set up 2: SELL LIMIT – Entry Price 84.90, stop loss 85.50, take profit 83.00
Stop loss: 60 PIPS
Take Profit: 190 PIPS