Trade of the Day: CAD/JPY

By: Dima Chernovolov

CAD/JPY continues to fall inside the 4-hour Up Channel chart pattern, which was previously identified by Autochartist. Autochartist measures the quality of this Up Channel at the 8-bar level – which is the result of the sharp Initial Trend (9 bars) and strong Uniformity and Clarity (7 bars). CAD/JPY is expected to fall further inside this Up Channel – in line with the earlier downward reversal from the resistance area shown below.

As can be seen from the daily CAD/JPY chart below, the top of this Up channel formed when the pair reversed down from the powerful resistance area located between the long-term resistance level 81.50 (which has been reversing the price form June) and the upper daily Bollinger Band. The proximity of this resistance area increases the probability CAD/JPY will continue to fall inside this Up Channel.