Trade of the Day: CAD/JPY

By: Dima Chernovolov

CAD/JPY recently broke the 4-hour Rising Wedge chart pattern which was previously identified by Autochartist. Autochartist rates the quality of this Rising Wedge at the 6-bar level – which is the result of the above-average Initial Trend (6 bars), medium Uniformity (5 bars) and significant Clarity (7 bars). CAD/JPY is expected to fall toward the forecast price 82,90 – 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 price earlier reversed down from the resistance area lying between the key resistance level 83,5 (multi-month high from October) and the upper daily Bollinger Band. The proximity of this resistance area and the overbought daily Stochastic increase the probability CAD/JPY will continue to fall toward the forecast price 82.70.