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Check out these potential consolidation and reversal setups on the short-term charts of CAD/JPY and GBP/JPY.

CAD/JPY: 1-hour

CAD/JPY 1-hour Forex Chart

CAD/JPY 1-hour Forex Chart

This pair has formed lower highs and found support around the 99.25 level, creating a descending triangle on its hourly time frame.

Price is inching towards testing support once more, so will Loonie bulls charge soon?

Moving averages seem to suggest otherwise, as the 100 SMA just crossed below the 200 SMA to hint that the path of least resistance is to the downside. In other words, the bottom of the triangle is more likely to give way than to hold.

If that happens, CAD/JPY could tumble by the same height as the triangle formation, which spans roughly 400 pips.

Stochastic is on middle ground to reflect consolidation, but the oscillator seems to be heading higher to reflect a bit of bullish pressure. In that case, another test of resistance around the 101.00 handle could follow.

GBP/JPY: 4-hour

GBP/JPY 4-hour Forex Chart

GBP/JPY 4-hour Forex Chart

Heads up for a reversal on Guppy!

This forex pair is about to complete a head and shoulders pattern on its 4-hour time frame, with price gearing up to test the neckline at the 160.00 major psychological mark.

A break below this could set off a slide that’s the same height as the reversal formation, which is a little over 800 pips tall.

The 100 SMA is above the 200 SMA for now, but the gap between the indicators has narrowed to reflect weakening bullish pressure. A bearish moving average crossover might be looming also, and this would encourage more sellers to jump in.

Just be careful when shorting since Stochastic is hovering near oversold levels to indicate exhaustion among sellers. Turning higher might mean one more push for pound bulls, so watch out!