By: Dima Chernovolov
CAD/JPY continues to fall inside the 4-hour Rectangle chart pattern which was previously identified by Autochartist. Autochartist rates the quality of this Rectangle at the 6-bar level – which is the result of the slow Initial Trend (2 bars), and strong Uniformity and Clarity (both rated at the 8 bars level). CAD/JPY is expected to rise further inside this Rectangle – in line with the earlier downward reversal from the key resistance area shown below.
As can be seen from the daily CAD/JPY below, the price earlier down up from the resistance area lying at the intersection of the key resistance level 84.00 (also reversed the price earlier this month), lower daily Bollinger Band and 61.8% Fibonacci correction of the previous sharp downward impulse from October. The proximity of this resistance area increases the probability CAD/JPY will continue to fall inside this Rectangle.
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