The CADJPY cross, in its 4-hour chart, illustrates a consolidation structure after the price developed an impulsive bullish movement from the March 18th low at 73.803, which finished when the cross topped at 78.479 on March 25th.
The consolidation structure realized by CADJPY looks like a corrective formation in three-waves, which could bounce from the current zone that coincides with the 61.8% of Fibonacci retracement of the previous impulsive movement.
A buy-side position would trigger from the current area. In our conservative bullish scenario, we expect a bounce that could reach the previous high at 77.04 as a psychological resistance.
The bullish scenario will be invalid if the price drops and closes below the level 74.75.
Trading Plan Summary
- Entry Level: 75.59
- Protective Stop: 74.75
- Profit Target: 77.04
- Risk/Reward Ratio: 1.7
- Position Size: 0.01 lot per $1,000 in account.