Trade of the Day: CAD/JPY

By: Dima Chernovolov

CAD/JPY continues to fall inside the daily Pennant chart pattern which was previously identified by Autochartist. Autochartist rates the quality of this Pennant at the 10-bar level – which is the result of the sharp Initial Trend (10 bars) and strong Uniformity and Clarity (8 bars). CAD/JPY is expected to fall further inside this Pennant – in line with the recent downward reversal from the resistance area highlighted below.

As can be seen from the daily CAD/JPY chart below – the pair recently reversed down from the resistance area lying between the key resistance level 78.22, upper daily Bollinger Band and the 38.2% Fibonacci retracement of the pervious downward impulse from February. The proximity of this resistance area increases the probability CAD/JPY will continue to fall inside this Pennant.