Overview: – The bears are rocking on the every time frame including daily, weekly and monthly chart where only bears are traceable. Since last week of February 2020 bears are taking the charge and pair is falling down continuously from 84.73 to 73.85 level which was a massive bearish downfall and then bulls tried 2-3 times to move up but they were unable to give closing even at 78 level itself which is a sign of bearishness.
Today at the time of writing the pair is trading at 75.89 level where bears are dominating the bulls. The way bears are heading the south side it seems like they are trying to make a fresh low of the year i.e. will break the 73.70 level in short term.
Technical Analysis: – The primary trend is down and secondary trend is also down so in a downtrend market sell on highs will be profitable strategy and we would suggest to our readers that convert every bounce as selling opportunity as long as 78.30 level remains intact on closing basis. Overall pair is moving below all the major and minor EMA lines which is providing us bearish signal.
From technical prospective we can see that a bearish flag pattern has been formed on daily technical chart which is formed on wider picture where the triple top pattern also formed at lower levels so the dual price patterns are pushing us to have a bearish view on the pair and further weakness is still on the cards.
Odds are in favor of bears and we will keep our view bearish on the pair as long as 78 level remain intact. The 73 level can be considered as key support level followed by 71 level whereas 78 level can be considered as key resistance level followed by 80 level. The bulls are struggling to break the 78 level which is high of previous swing’s. On contrary A valid breakout of this level will open the way towards the 80 and 82 level.
What next- “We expect CAD to underperform its major dollar bloc peers, but the risk backdrop looks a bit ominous to us, we diversify CAD exposure and think it makes sense give it another go on CAD/JPY shorts as a cleaner expression of CAD bearishness for now.”
Trade idea- Based on the chart and studies above we would suggest our traders and investors that go for short at 76 level for the target of 73 and 71 with the tight stop loss of 78 level.
