Looks like an ascending triangle pattern has now formed on CAD/JPY’s 1-hour chart. Since it’s an ascending triangle, our directional bias is therefore to the upside. The moving averages are also in uptrend mode, which is a real confidence booster, but we warned that stochastic is currently pointing down and moving away from overbought territory. Also, like all triangle forex chart patterns, there is a possibility that price will break out to the downside, so make preparations for such a scenario too. In any case, a breakout will likely have enough momentum for a 250-pip move, based on the height of the pattern.
USD/JPY has been bouncing up and down while respecting resistance at the 114.50 minor psychological level and support at the 111.10 handle, giving us a 340-pip trading range or rectangle in the process. Price is presently grinding higher, but seems to be encountering sellers halfway through its journey upwards. In addition, stochastic is already indicating overbought conditions while the moving averages have crossed-over into downtrend mode, with the 200 SMA acting as dynamic resistance to boot, so there’s a chance that sellers will attempt a downside rectangle breakout.
EUR/JPY has been steadily climbing higher and an ascending channel has now emerged. And as I always say, one of the more conservative ways to play an ascending channel is to look for opportunities to go long when price is near or at the channel’s support area. Well, price has just bounced off the channel’s area recently, but the moving averages are now indicating a downtrend and price seems to have difficulty climbing higher. Moreover, stochastic has already reached the overbought area, so there’s a possibility that price will go back down to test the channel’s support area or even attempt a downside breakout, so do be careful. As usual, just make sure to practice proper risk management should you find a trade based on this or any of the other charts, alright?
Forex Chart Settings:
To get the complete picture and avoid getting blindsided by economic data, you also have to do your fundamental analysis. Lucky for us, Pip Diddy fills us in on what we need to know about fundamentals with his Daily Forex Fundamentals.