CAD/JPY: No Slowdown In Sight
Good afternoon guys, with the May Day bank holiday to start the week, we would expect a slow start to this weeks price action. However, that notion has been proven wrong with a wave of volatility that has provided lucrative trade setups that have transcended through the week.
Being fresh into the month, we can take a look at CAD/JPY on the monthly. We can see the failure to penetrate and sustain above our moving averages which was represented by a doji candlestick. This started off with explosive bearish momentum leaving us with what could form to be a bearish engulfing come month end. Overall, this paints a bearish picture for us to pay attention to as we filter through the lower timeframes.
From a weekly perspective, we can see the week got off to an interesting start with the markets gapping down following threats from Donald Trump threatened to increase Tariffs on $200 Billion of Chinese goods this coming Friday which caught investors off guard. The growing concern over trade tensions created an urgency for investors to shift their wealth into safe-havens such as the Yen.
This led to what we can see on the daily as a critical wedge breakout to the downside which followed through beyond the second trendline touch which would have acted as our first target. Should we continue this bearish momentum into next week we can keep our eyes peeled to see 80.900 and 79.700 before re-evaluating where we will be heading next.