Hey Traders,
CADJPY has reacted sharply to the 106.20 resistance zone, forming a potential lower high and setting the stage for a short-term bearish reversal. The price appears to be respecting the previous structure, and a drop toward the 105.00 and 104.00 regions may be on the cards if downside momentum builds.
Current Market Conditions:
Fundamental Analysis/Outlook:
The Canadian dollar has been under pressure as crude oil prices retreat, reducing demand for the CAD due to its strong correlation with oil. Additionally, the Bank of Canada’s recent rate guidance hinted at a more dovish stance compared to the Fed and BoJ, limiting CAD upside.
Meanwhile, JPY is drawing strength from rising demand for safe-haven assets amid ongoing geopolitical concerns and recent risk-off sentiment triggered by global growth worries. With central banks showing policy divergence and investor caution rising, CADJPY may face continued downward pressure.
Targets:
Risk Management:
Technical Outlook:
Price failing to sustain above key resistance
Lower high formation evident
Clean liquidity zones to the downside provide favorable structure for bearish continuation
Conclusion:
CADJPY looks poised for a potential reversal after rejecting major resistance. Watch for confirmations below 105.60 to increase conviction. The setup aligns with both technical and fundamental bias for yen strength.
Sign-off:
"In trading, the most dangerous words are 'it’s different this time.' Trust the chart, trust the process."
I would love to hear your thoughts in the comment section, and please hit boost and follow for more ideas. Thank you, and profitable trading to you all!
CADJPY has reacted sharply to the 106.20 resistance zone, forming a potential lower high and setting the stage for a short-term bearish reversal. The price appears to be respecting the previous structure, and a drop toward the 105.00 and 104.00 regions may be on the cards if downside momentum builds.
Current Market Conditions:
- Strong rejection at the 106.20–106.30 resistance level, which has historically acted as a supply zone.
- Price is now hovering just below resistance and may confirm a bearish structure on lower timeframes.
- Clean downside path if 105.60 is broken, potentially opening space down to 104.40, with extended downside support at 103.98.
- Risk-reward ratio looks favorable from current levels if resistance holds.
Fundamental Analysis/Outlook:
The Canadian dollar has been under pressure as crude oil prices retreat, reducing demand for the CAD due to its strong correlation with oil. Additionally, the Bank of Canada’s recent rate guidance hinted at a more dovish stance compared to the Fed and BoJ, limiting CAD upside.
Meanwhile, JPY is drawing strength from rising demand for safe-haven assets amid ongoing geopolitical concerns and recent risk-off sentiment triggered by global growth worries. With central banks showing policy divergence and investor caution rising, CADJPY may face continued downward pressure.
Targets:
- TP1: 105.60
- TP2: 104.44
- TP3: 103.98
Risk Management:
- Stop-Loss: Above 106.40 to protect against bullish continuation
- Confirm bearish price action (e.g., break and retest of intraday lows) before fully committing
- Maintain proper lot size to manage drawdown across correlated yen pairs
Technical Outlook:
Price failing to sustain above key resistance
Lower high formation evident
Clean liquidity zones to the downside provide favorable structure for bearish continuation
Conclusion:
CADJPY looks poised for a potential reversal after rejecting major resistance. Watch for confirmations below 105.60 to increase conviction. The setup aligns with both technical and fundamental bias for yen strength.
Sign-off:
"In trading, the most dangerous words are 'it’s different this time.' Trust the chart, trust the process."
I would love to hear your thoughts in the comment section, and please hit boost and follow for more ideas. Thank you, and profitable trading to you all!
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.