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CAD/JPY is trading in a tight pennant-like pattern on the 1-hour time frame.What makes the setup more interesting is that the consolidation is happening around the 87.00 major psychological handle and that drawing a trend line with March 23’s lows can create a legit ascending channel.
Buying at current levels is a good bet if you believe that the Loonie can reach the 87.50 mid-channel levels near the 100 and 200 SMAs. Aggressive Loonie bulls can even aim for 88.25 April highs if they see enough momentum!
CAD/JPY bears can also start placing orders, but they might want to wait until the Loonie makes a clear break below the trend line support to see if they have enough bears on their team for a longer-term reversal.
I know you love them dramatic setups so lemme show you EUR/USD giving us cliffhanger vibes just outside a channel resistance!EUR/USD is hanging at the 1.1875 area, which is above a trend line resistance that hasn’t been broken since late February. Thing is, it’s also just under the 200 SMA that could attract them euro bears.
Are we looking at a breakout in the making? Watch out for EUR/USD making new April highs and busting through the 200 SMA for a possible move up to the 1.2000 major psychological handle.
If EUR/USD bears want to make the upside “breakout” a fakeout as they did back in February, though, then they should at least drag the euro back down inside the descending channel. Bears can then target 1.1775 or even 1.1700 once they get enough momentum.