CADJPY Down 2 Pips On Hourly Chart, Breaks Above 20, 100 and 200 Day Averages; Sentiment Strongly Favors Sellers

Hourly Update

(Last Updated October 6, 2020 15:15 GMT)

At the time of this writing, CADJPY’s rate is down -220 pips (-0.03%) from the hour prior. This is a reversal of the price action on the previous hour, in which price moved up. Regarding the trend, note that the strongest trend exists on the 50 hour timeframe. Of note is that the 20 hour changed directions on CADJPY; it is now pointing up. The moving averages on the hourly timeframe suggest a bearishness in price, as the 20, 50, 100 and 200 are all in a bearish alignment — meaning the shorter duration moving averages are below the longer duration averages, implying a stable downward trend.

CADJPY End of Day Recap

Updated 00:30 GMT (04:30 EST)

CADJPY entered today at 79.678, up 58 pips (0.73%) from the day prior. Out of the 40 instruments in the Forex asset class, CADJPY ended up ranking 5th for the day in terms of price change. Below is a price chart of CADJPY.

CADJPY

CADJPY Technical Analysis

First things first: CADJPY crossed above its 20, 100 and 200 day moving averages yesterday. As for the alignment of the moving averages, well, it’s a bit mixed up; the 20, 50, 100, and 200 do not progress from largest to smallest, or vice versa. The closest is the 50 day average, which is 15.8 pips away. Volatility for CADJPY has been contracting over the past two weeks relative to volatility over the past month. Whether volatility reverts will be something to watch. Rangebound traders may wish to note that CADJPY is getting close to its upper bollinger band, which, when coupled with the lack of trend on a 14 day timeframe, may be an opportunity for short sellers. Trend traders will want to observe that the strongest trend appears on the 30 day horizon; over that time period, price has been moving down. Price action traders in particular will want to note that the 14 day period appears to show price forming a base; this could indicate that a support/resistance level is developing. For additional context, note that price has gone down 16 out of the past 30 days.

The View From Around the Web

Of note is that traders in aggregate have opinions on CADJPY, with 4 buy signals on our radar and 16 sell signals. This imputes a buy/sell ratio of 0.25, which is bearish. As for the rationale, technical traders seem to be citing the appearance of a fibonacci technical pattern. Here’s a piece we found on tradingview.com; below is a short snippet from it to give you a taste.

Evening Traders, Today’s Analysis – CADJPY – trading at Range-Mid where a bearish retest is probable, confirming a potential right shoulder of a H&S pattern….Points to consider, – Bearish Price Action – Daily S/R Resistance – Range Mid Resistance (.50 Fibonacci Confluence)- Volume Below Average CADJPY’s immediate price action is bearish under range-mid; this allows us to have a bearish bias on the market….Current resistance, range-mid, in confluence with the 200 MA and .50 Fibonacci, a rejection here is plausible as price action morphs into a probable right shoulder.