CAD/JPY Price Analysis: Bulls seeking a weekly extension for high level R/R

• CAD/JPY is shaping up for a compelling bullish set-up in an extension of Dec correction.
• Bulls can target a weekly continuation level on a retest of 4-hour support structure. 

The pair is in the bullish territory on the lower time frames but is due for a correction.

Bulls can apply a swing trading strategy for a discount from the support structure and the following top-down analysis illustrates how to do so and the rationale behind the set-up.

Monthly charts

On the monthly charts, we have a market that is retesting the 61.8% Fibonacci as a support, so the market can now easily head towards the 78.6% Fibo.

In doing so, it will clear the overhead resistance and confirm the upside bias. 

Weekly chart

The recent lows is a confluence level of the monthly 38.2% Fibo and the weekly 50% mean reversion, reinforcing the support level.

Similarly, the W-formations have seen a correction to their neckline supports from where the price would be expected to now extend higher in a resumption of the bullish trend. 

By measuring the recent correction, a -0.272% Fibo target comes in at 82.70.

Bulls can look for an opportunity on the lower time frames such as the 4-hour chart:

4-hour chart

With a stop loss below the 78.6% Fibo of the recent bullish impulse and a buy limit at the 38.2% confluence with the market support structure, there are two levels of risk to reward (R/R) ratios as illustrated on the above chart.