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 7-bar level – which is the result of the strong Initial Trend (8 bars), significant Uniformity (7 bars) and near-maximum Clarity (9 bars). CAD/JPY is expected to fall toward the forecast price 75.90  – in line with the earlier downward reversal from the key resistance zone shown below.

As can be seen from the daily CAD/JPY chart below – the price earlier reversed down strongly from the key resistance area located between the strong resistance level 78.42 (former multi-month low from last August) and the 38.2% Fibonacci correction of the previous sharp downward impulse from February. The proximity of this resistance area adds to the probability CAD/JPY will continue to fall toward the forecast price 75.90.