CAD/JPY 4H and 1H - SELL OANDA:CADJPY Analysis
4-Hour Chart Analysis
The 4-hour chart shows CAD/JPY in a clear downtrend with lower highs and lower lows. Key observations:
Price has been declining from around 110.500 to current levels around 103.079
Recently formed a potential double bottom around 102.500 level
Currently showing some consolidation/minor bounce from these lows
Price is below key moving averages (based on the chart structure)
1-Hour Chart Analysis
The 1-hour chart provides a closer look at recent price action:
Shows a recent bounce from the lows
Price has formed a small consolidation pattern
Currently at 103.079 with a -0.07% daily change
Some short-term resistance likely around 103.500-104.000 area
Trade Setup:
Direction: Looking for potential short entry
Entry Point : Enter short at 103.500-103.700 zone (on a rejection/failure to break higher)
Stop Loss: Place stop at 104.000 (approximately 30 pips from entry, matching your risk tolerance)
Take Profit: Target the recent lows at 102.500 area (100+ pip potential)
Risk-to-Reward Ratio: Approximately 1:3
Rationale:
The dominant trend is clearly bearish on larger timeframes
Recent bounce appears corrective rather than trend-changing
Previous support levels often become resistance on retests
The 103.500-104.000 zone should act as resistance
Alternative Scenario:
If price breaks above 104.000 with conviction, I would avoid entering and reassess the setup, as this could indicate a deeper correction or potential trend change.
Important Note:
Wait for price action confirmation at the resistance zone before entering (such as bearish engulfing, rejection candles, or failure to break higher with diminishing volume).
