cad/jpy

A chart for luis who is having difficulty in this pair in getting direction.

The reason Luis is not seeing a clear picture is due to not looking from the 10 miles view. Always start from a high time frame and drop down. First chart is of the monthly, it is clear that price has hit sellers and is dropping back, nothing unusual or mysterious in this and is typical of how the market reacts to historic trading. Our bias on the monthly is bearish and we need see how price is playing out on lower time frames.

Monthly chart.

Weekly chart.

Two blue lines on this chart with the upper showing where the monthly supply was and the lower is weekly supply just visible on the left of the chart. The price is now within the range setup by these two price areas and last weeks weekly candle close shows no willingness on the part of the bears to push price lower and the best they have done is hit what is support....for who knows how long.

The ellipse shows price as it pushed up into the weekly supply area and how much effort was required to get through in order to reach a higher target. Clearly the amount of money placed in the market to do this must be put to work and the pace at which price dropped off two weeks ago (3rd candle back) is a clear sign of bulls wasted from the effort and plenty profit taking done.

The area within the ellipse wont have many buyers remaining and while I dislike making any predictions it typically results in price being able to fall easily through that area with little bullish reaction until buyers lower down come into play.

Daily chart.

This is where Luis focused his attention and lost out on all the good intel on the charts above. You have to know where price has been in order to have a better understanding of where it can go next. The upper blue line on this chart is weekly supply and once this was pinned the profit taking came in hard and fast, this caused the market to fall off quickly and on this time frame there was no opportunity to take a short trade. The lead up to this was a range play and difficult to find quality entries with low risk. Given the market was bullish you would have to look for entries off the bottom of the range and only when there was clear intent to take the market back up. Going down to the 4hr and lower is essential for better entries in ranges, if thats the kind of trading you prefer.

4hr chart.


Upper blue line is higher time frame supply which is clear from what we have seen already. The profit taking is very clearly seen from long bodies bearish candles breaking numerous historic buying areas. The subsequent pull back took a much longer period of time and no interest from pro money. The game for the bulls was up at this stage and now was a simple matter for pro money to get enough time in which to place their short orders into the market before it drops away.

Two minor pull backs with small ranges is what they used to sell into. The purist supply and demand traders got wiped out in this because that kind of trading alone does not take the dynamics of market sentiment into account and where a pull back is looked at as a reason to continue the previous move. This is why you must look at higher time frames to get direction and if that means waiting a week or more for the main move to continue, then it pays to do so.

Finally, the bottom of the chart shows a blue line just in view. This is the range setup from the previous time frame and you see a closer view here of this range and how price reacted off both sides of the range. The near current reaction at the bottom of the range is so far showing no interest in climbing back up.

Note the dominant bullish candles are reducing in the price range of their real bodies and over all range. The bearish response to these candles is also clear, there is a slow shift in sentiment and we have to wait for another bounce or break out of the lower end of the range. At this day of the week there wont be a good setup for a trade on this pair until at least next week.

I will leave the lower time frames out because they will only show noise at the moment and until there is better price action no closer in views are helpful.