In this article, we want to give you a “heads up” on CADJPY.
The pair is pulling back into the strong confluence of the upside support 85.500-85.800 zone
This zone is significant for the near-term price action development. This is providing a perfect long risk to reward entry.
In this kind of situations, waiting is not a good option. Traders should execute buy trades as early as possible. The risk by placing a stop loss below the 85.130 level is almost 60 pips but the possible reward could be much greater even more than 200 pips per unit if we get a significant break above the 87 key upside resistance level. Profit target should be no higher than the 89-90 zone. 85.130 level represents 75% of the Fibonacci retracement for the 84-89 swing up.
By using our top-down trading technical analysis we have identified the key levels which will be triggers for the entry and exit, based on the present market conditions of the instrument.
Happy trading! (click on the chart to enlarge it)
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