Loonie bulls just can’t seem to catch a break!
CAD/JPY is retreating from its triangle resistance and is forming a reversal pattern, too.
Check out these bearish signals on the 4-hour chart.
CAD/JPY: 4-hour
CAD/JPY 4-hour Forex Chart
This pair is forming a descending triangle pattern, and the resistance is lookin’ pretty solid right now.
A couple of failed attempts to break past the ceiling around the 109.00 handle took place, sending CAD/JPY back down to support near the 107.00 mark.Closing below this double top neckline could send the pair even lower to the very bottom of the triangle at the 105.50 minor psychological mark.
Technical indicators are painting a different picture, though. For one, the 100 SMA is above the 200 SMA to suggest that Loonie bulls have the upper hand.
In addition, the 200 SMA dynamic inflection point seems to be holding as a floor. If buyers refuse to let up, another test of the triangle top might take place.
Don’t forget that Stochastic is turning higher from the oversold region and has plenty of room to head up north. This means that CAD/JPY could keep following suit while bullish vibes are present.
Sustained upside momentum might even spur an upside triangle breakout and a rally that’s the same size as the chart pattern. That’d be roughly 450 pips yo!
The upcoming Canadian jobs report and Ivey PMI might determine where this pair is headed, as upbeat results could stoke expectations for another BOC hike.
Just make sure you practice proper risk management when trading the news!
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