While I've only marked up some of the more recent interactions price has had with the 84.30 zone, its a level has proved to be significant in the past.
Of particular interest to me is how price has behaved around this level over the last 8 or 9 months.
Notice how from mid-August 2018 through to early December 2018, price bounce off that level three times - a point that can't be argued. Why did it bounce? Well, buyers felt that at this level, they were picking up a bargain.
The level was well defended.
Then, of course, we saw the immense equities sell of in December of 2018. The Yen, being one of the worlds favored "risk-off" assets, appreciated significantly, driving the CADJPY down.
And very soon, we'll see the first test of this same level from below, with the confluence of a price being trapped in up upward sloping channel. In other words, a big, fat bearish candle rejecting 84.30 would have three things going for it:
1. Price would be closing lower (a key element for a successful sell trade)
2. Price would be rejecting the very important 84.30 level
3. Price would be respecting the channel its been stuck in for some time, further suggesting a move lower.
The trade isn't there yet. 84.30 needs to be tested. Let's see that test, let's see if price fails and falls and let's be ready to sell.
Of particular interest to me is how price has behaved around this level over the last 8 or 9 months.
Notice how from mid-August 2018 through to early December 2018, price bounce off that level three times - a point that can't be argued. Why did it bounce? Well, buyers felt that at this level, they were picking up a bargain.
The level was well defended.
Then, of course, we saw the immense equities sell of in December of 2018. The Yen, being one of the worlds favored "risk-off" assets, appreciated significantly, driving the CADJPY down.
And very soon, we'll see the first test of this same level from below, with the confluence of a price being trapped in up upward sloping channel. In other words, a big, fat bearish candle rejecting 84.30 would have three things going for it:
1. Price would be closing lower (a key element for a successful sell trade)
2. Price would be rejecting the very important 84.30 level
3. Price would be respecting the channel its been stuck in for some time, further suggesting a move lower.
The trade isn't there yet. 84.30 needs to be tested. Let's see that test, let's see if price fails and falls and let's be ready to sell.
Looking good. I'd like to see a retest of that channel, perhaps on the 4-hour or daily chart.