CAD/JPY: there may be a pattern
Trade idea
BUY 82.60; TP1 83.20; TP2 84.00; SL 82.40
CAD/JPY has risen to 82.50 but met the resistance of the 50-day MA. The price action seen on the daily and weekly chart since the middle of July is so far corresponding to a bearish harmonic “Butterfly” pattern. The completion of the pattern implies the advance at least to the 84.00 area before the reversal to the downside. The recent advance above the September high, the 200-day MA in the 82.05 area as well as this year’s resistance line is in line with this scenario.
In the near term, consolidation may take place. The pattern will be valid as long as CAD/JPY is trading above 81.30 (100-day MA). The bullish scenario will get the ultimate confirmation on the break above 82.50. The first bullish target will be at 83.25 (July highs), while the next target will lie at 84.00.
