CADJPY: Appears to be in a corrective phase
Updated
We have witnessed a significant bullish ride on the CADJPY pair from the low of the 24th March at 94.069 to the high of 31st March at 98.745, accounting for over 450pips move. After this rally, it appears that the move has reach a termination point, where correction of the 467Pips bullish move is expected. My expectation of the corrective downward move is based on the following market realizations:
1. The formation of a bearish crab harmonic pattern on H1 TF. The long AB axis, confirming the possibility of an extended Wave 1.
2. Price divergence. (This divergence occurred on my indicator vs the price). This lend credence to the fact that buyers may be getting exhausted. And sellers are about stepping in.
3. The formation of rejection candles to the upside.
Based on these parameters, I will be entering short on the pair with a target to 97.164 region, which also coincides with my fib golden ratio.
I'm also aware that the corrective wave could be a flat and we may see a temporary price rally to 98.830, but my overall outlook is bearish until the correction is over.
1. The formation of a bearish crab harmonic pattern on H1 TF. The long AB axis, confirming the possibility of an extended Wave 1.
2. Price divergence. (This divergence occurred on my indicator vs the price). This lend credence to the fact that buyers may be getting exhausted. And sellers are about stepping in.
3. The formation of rejection candles to the upside.
Based on these parameters, I will be entering short on the pair with a target to 97.164 region, which also coincides with my fib golden ratio.
I'm also aware that the corrective wave could be a flat and we may see a temporary price rally to 98.830, but my overall outlook is bearish until the correction is over.
Note
Probable move, in case we have a flat correction. I will keep my fingers crossed.Trade closed: target reached
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