CADJPY bear flag in play
CADJPY is rejected again by the strong upside resistance 81.900. We are within a long*term consolidation triangle with well-defined breakout levels which is ready for a breakout. For the upside reversal from here, we need to see a price action continuation above 79 for a swing higher to a key upside breakout level 81.900. Breakout downside reversal long-term will come upon a break below 78.300. This could be the beginning of the 3rd Wave lower within a 3rd impulsive wave.
On a daily chart, we can see that the pair is going for another test of the 78.300 support/downside resistance. We need to see a daily price action below this level here. You can go short on a break below the 78.300. Our trading system is indicating a potential of 250-500 points of profit. Look for the short trade entries invalidation to come only on a clear daily close above 79.700.
We have used the combination of the top-down trading analysis to get these key levels explained in the charts.
