FxWirePro: CAD/JPY’s Interim Bulls Seem Deceptive, Major Downtrend Still Imminent On Head & Shoulder Pattern – Trade & Hedging Setup
CADJPY trades below 200- day MA, dip till 80 likely
Candlestick pattern- Bearish engulfing candlestick
As per our analysis, CADJPY continues to trade lower for 5th day and lost more than 150 pips on the weak Canadian dollar. USDCAD has formed a minor bottom around 1.3045 and jumped more than 200 pips on broad-based US dollar buying, increased hopes of rate cut by BOC in the coming months. The overall trend is still soft as long as resistance 83.55 holds.
WTI crude oil price jumped more than $1.5 after API shows an unexpected draw in inventory. It has dropped by 541000 barrels in the week to Nov 8th vs forecast of 1.6 million bbls. Any convincing break above $58 targets $60.50.
Technically, major support is around 81.75 (23.6% fib), any violation under will drag the pair to the next level 81/79.80.
The near-term resistance is around 83.55 high made on Oct 28th, 2019, breaks over targets 84.03/84.35. Major trend reversal can be seen only if pair closes above 84.35, a jump till 85/85.20 likely. The minor resistance 82.50/83.10.
It is good to sell on rallies around 82.25-30 with SL around 82.70 for the TP of 81.