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Short-term Trading Idea CAD/JPY – Bear Speculation: Expected Forming of Double Top

Trading opportunities on currency pair: growth has stopped in the Fibonacci zone of 61.8-76.4 from different waves. A double top formation has appeared. If the lower limit of the B channel is broken, the pattern will start to come off. The target is 98.25.

The March idea didn’t work out. As well as a fall to 91.72, the CAD/JPY headed upwards from 93.74. The growth of the Canadian stopped in the Fibonacci zone. After Friday’s fall, the risks of a correction to 98.25 to the lower limit of the A channel on the CAD/JPY have shot up. 76.4% - Fibonacci from a fall from 103.98 to 91.72, 61.8% - a fall from 106.50 to 91.72.

On Friday the CAD/JPY fell to 0.9974 after the release of weak data for Canadian retail sales. The retail sales were down by 0.1% in April, although they were expected to rise 0.7%.

On Monday we have two upward channels: A and B. If the lower limit of the B channel will be broken, a double top pattern will start to come off. Through this basic scenario, I’ve highlighted how the Canadian could correct to 98.25.

If the Canadian rebounds from the trend and the price surpasses the 101.13 maximum, a growth scenario will start to be realized. Here one must keep an eye on the price of oil. Oil has been in a correctional phase since the start of May this year. Due to this, growth on the CAD/JPY has slowed.

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