CAD/JPY Daily Price Forecast – 7th August 2025

Chart Overview

• Timeframe: H4 (4-hour)

• Indicators:

  • Two Moving Averages (likely 50 EMA in yellow and 200 EMA in red)

  • Key levels marked:

    • Sell Stop: 106.979

    • Take Profit (TP): 106.636

    • Stop Loss (SL): 107.431

Trend Analysis

• Recent Price Action:

  • The pair has recently broken below both the yellow and red moving averages, indicating a shift from bullish to bearish momentum.

  • After a sharp drop, price is consolidating below the moving averages, suggesting resistance at these levels.

• Moving Averages:

  • Yellow MA (shorter period): Now below the red MA, confirming a bearish crossover.

  • Red MA (longer period): Acting as dynamic resistance.

Key Levels

• Sell Stop @ 106.979:

  • This is just below the recent consolidation, suggesting a breakout trade to the downside.

• Take Profit (TP) @ 106.636:

  • This level is near a previous support zone, where price has bounced before.

• Stop Loss (SL) @ 107.431:

  • Placed above the recent swing high and above both moving averages, providing a safe buffer against false breakouts.

Trade Setup

• Bias: Bearish

• Entry: Sell Stop at 106.979 (wait for confirmation of downward momentum)

• Stop Loss: 107.431 (above resistance and moving averages)

• Take Profit: 106.636 (at next support)

Risk/Reward Ratio:

• Risk: ~45 pips

• Reward: ~34 pips

• R/R Ratio: ~0.75 (slightly less than 1:1, so consider adjusting TP or SL for better R/R if desired)

Technical Signals

• Bearish Crossover: The shorter MA crossing below the longer MA is a classic bearish signal.

• Price Below MAs: Indicates sellers are in control.

• Consolidation Breakout: The sell stop is set to catch a move if price breaks out of the current range to the downside.

Potential Scenarios

• Bearish Continuation:
  If price breaks below 106.979, expect momentum to carry it to the next support at 106.636.

• False Breakout:
  If price reverses and moves above 107.431, the bearish setup is invalidated, and a reversal could be in play.

Summary

• CAD/JPY is showing bearish momentum on the H4 chart, with price trading below both key moving averages.

• The setup favors a short position, with a sell stop below consolidation, a tight stop loss above resistance, and a take profit at the next support.

• Watch for confirmation of the breakout before entering, and monitor for any reversal signals.