CADJPY has rallied almost 560 pips since its major breakout at 88.30 and 87.20 afterwards. These were some really major price actions which the pair took an escape from after making its highest highs on the daily time frame at 91.0. This was the area where our higher degree of 5 wave structure ended and the retail traders started positioning themselves for sell off mood. Market experienced an over all sell off across the board with japenese yen gaining strength against most of the currencies and this was experienced due to the delta variant covid causing huge slumber to the first world with increasing number of infected cases and deaths. We were expecting that CADJPY was going to take bullish turn at 61.8Fibb level but as the structure formed we got to notice that the major correction had ended and there was a minor 5 wave bearish structure within the bigger picture. Now the market has already been showing oversold conditions in all the technicals i.e relative strength index, MACD and STOCHASTIC so we will definitely have a correction on the technical side as well. 

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

CADJPY will be making a minor 5 wave bullish structure or an 'abc' wave of higher degree for it is standing at our 50%fibb level which will provide an upward thrust to the pair to atleast its recent previous breakout at 87.20. We have our EMA200 at our major support line where the demand meets the consumers and will reach out to its higher supply zones. This level had previously been supported in Feburary and March as well with high liquidity and more retailers supporting the direction of the big banks. At the moment we do have bearish channel in which the pair has taken a refuge at for supporting bears but there will most probably be a breakout in form of correction towards EMA50 i.e 88.75. 

CADJPY OVERSOLD CONDITION/ READY TO BUY

Jul 20 2021