Setup
1: Price has found and broken above previous structure highs. It has now come down, and indicated by the previous candles wick rejection, is appearing to respect the area as support.
2: We can see that the golden zone on our fib tool and our ruled up key zone are almost identical. While this should be taken with a grain of salt, as both of these are rather subjective in how they are created and identified, the fact they are matching up so well is a good sign.
3: The Canadian interest rate is 4.5 while Japans is -0.10.
Interest rates play a big part in banks/hedge funds deciding where to invest their money as currencies with a higher interest rate are more attractive to foreign investment.
This causes the value of the currency with a higher interest to increase as more people buy it as the demand of the currency grows while the supply does not.
4: Brining it down to the 15/5M (as shown below) we can see that price has begun to make higher highs and higher lows. While this on the lower timeframe itself is not indictive of any major changes in price movements we should view this CHOCH (change of character) as what may the resumption of the overall uptrend.
Entry
My recommended entry for people scalping would be to buy when price closes above the previous high on the 15M. If price retraces and breaks the recent low before this I would argue against scalping this move.
People looking to swing trade this position have two options when it comes to entries IMO.
The first one, and the one I will be looking for, is to see a close above the previous high of 102.922 on at least the 1H or more preferably the 4H.
The second, which I recommend against, is to set an order above the close so that when market opens you are filled.
Take Profit
I am looking at two zones as a possible TP. For a longer-term trade to hold throughout the week 104.045 is a good price to shoot for. This is where the bulls put up their last major resistance against the bears before the drop off in price below the range that was formed from September to November.
For traders looking to scalp the possible move we may see Monday open a return to the previous high of 102.905 is a safe bet.
Stop Loss
If I do take this trade on market open I will personally be putting my SL at 101.487, right on the 78.60 fib level. If price retraces to this level we would have made lower lows on the lower timeframe therefore removing one of my conformations for the trade entry. If we do pullback to here we could possibly see the market turn around as this area itself could be considered previous resistance.
For people looking to scalp the open I would say 101.961, just below the second last low we made, is safe place. Putting your SL at the last low around 102.094, is too close when factoring in market spreads during the beginning of the trading week.
Notes
This trade being a JPY cross is not something I am currently planning to take as as a similar setup on USDJPY is occurring which has better price action and lower spreads. I would recommend anybody taking the scalp trade to leave a runner as a break above the highs could see a massive push upwards that comes with the volatility associated with JPY pairs.
DISCLAIMER
Entering this trade before the first Tokyo session of the week could see price action that is not indictive of the market sentiment and what is going to be occurring once smart money is involved.
1: Price has found and broken above previous structure highs. It has now come down, and indicated by the previous candles wick rejection, is appearing to respect the area as support.
2: We can see that the golden zone on our fib tool and our ruled up key zone are almost identical. While this should be taken with a grain of salt, as both of these are rather subjective in how they are created and identified, the fact they are matching up so well is a good sign.
3: The Canadian interest rate is 4.5 while Japans is -0.10.
Interest rates play a big part in banks/hedge funds deciding where to invest their money as currencies with a higher interest rate are more attractive to foreign investment.
This causes the value of the currency with a higher interest to increase as more people buy it as the demand of the currency grows while the supply does not.
4: Brining it down to the 15/5M (as shown below) we can see that price has begun to make higher highs and higher lows. While this on the lower timeframe itself is not indictive of any major changes in price movements we should view this CHOCH (change of character) as what may the resumption of the overall uptrend.
Entry
My recommended entry for people scalping would be to buy when price closes above the previous high on the 15M. If price retraces and breaks the recent low before this I would argue against scalping this move.
People looking to swing trade this position have two options when it comes to entries IMO.
The first one, and the one I will be looking for, is to see a close above the previous high of 102.922 on at least the 1H or more preferably the 4H.
The second, which I recommend against, is to set an order above the close so that when market opens you are filled.
Take Profit
I am looking at two zones as a possible TP. For a longer-term trade to hold throughout the week 104.045 is a good price to shoot for. This is where the bulls put up their last major resistance against the bears before the drop off in price below the range that was formed from September to November.
For traders looking to scalp the possible move we may see Monday open a return to the previous high of 102.905 is a safe bet.
Stop Loss
If I do take this trade on market open I will personally be putting my SL at 101.487, right on the 78.60 fib level. If price retraces to this level we would have made lower lows on the lower timeframe therefore removing one of my conformations for the trade entry. If we do pullback to here we could possibly see the market turn around as this area itself could be considered previous resistance.
For people looking to scalp the open I would say 101.961, just below the second last low we made, is safe place. Putting your SL at the last low around 102.094, is too close when factoring in market spreads during the beginning of the trading week.
Notes
This trade being a JPY cross is not something I am currently planning to take as as a similar setup on USDJPY is occurring which has better price action and lower spreads. I would recommend anybody taking the scalp trade to leave a runner as a break above the highs could see a massive push upwards that comes with the volatility associated with JPY pairs.
DISCLAIMER
Entering this trade before the first Tokyo session of the week could see price action that is not indictive of the market sentiment and what is going to be occurring once smart money is involved.