Trade of the Day: CAD/JPY

By: Dima Chernovolov

CAD/JPY continues to fall inside the hourly Up Channel chart pattern which was previously identified by Autochartist. Autochartist rates the quality of this Up Channel at the 7-bar level – which is the result of the slow Initial Trend (3 bars), strong Uniformity (8 bar), and significant Clarity (7 bars). CAD/JPY is expected to fall further inside this Up Channel – in line with the earlier upward reversal from the key support area shown below.

As can be seen from the daily CAD/JPY chart below –  the pair earlier reversed up sharply from the support area lying between the key support level 74,00 (which also stopped the sharp uptrend in March) and the lower daily Bollinger Band. The proximity of this support zone increases the probability CAD/JPY will continue to rise inside this Up Channel.