CADJPY had a very bullish day yesterday. The daily candle barely has any upper shadow. Today’s first two H4 candles came out as bearish candles. However, a very significant level has been held. The price had a rejection at the level earlier. The level got breached. If the level produces an H4 bullish engulfing candle, buying the pair may get us some green pips with a good risk and reward ratio. Let us have a look at the H4 CADJPY chart. This trade idea was generated by our powerful Elite Swing Trader System.

The level of 82.165 got breached yesterday by a very commanding H4 bullish candle. The chart shows that the price after producing a Doji candle headed towards the broken level. The last H4 candle closed within the breakout level. If the next candle comes out as a bullish engulfing candle closing above the level of 82.320, the price may head towards the level of 82.920 with a good buying pressure. Let us have a look at the summary of the trade

• Buy Stop Order: 82.510
• Stop Loss: 82.167
• Take Profit: 82.969

On an ABC pattern trading, the percentage of retracement is very important. 38.2% retracement is considered the best retracement. However, other levels such as 61.8 and 78.2 are considered a good level for a retracement as well. What most important is the signal candle’s attribute. A strong reversal candle at those levels is the most important factor to take entry as far as ABC trading pattern is concerned.   For more trade ideas, join the Price Action Society... If you like our analysis and would like to receive 3 to 7 trade ideas per day, then click here to learn more about the Price Action Society.