FxWirePro: CAD/JPY bulls travel in rising wedge on major trend and inverted head and shoulder on minor trend – one touch binaries to trade and long hedge
Source: FxWire Pro - Technicals / 29 Dec 2017 01:58:00 Eastern Standard Time
Chart and candlestick pattern formed- Rising wedge pattern and bullish engulfing candlestick (on weekly plotting), inverted head and shoulder pattern (on daily plotting).
Please observe the troughs at 87.787 (shoulder 1), 86.759 (head) and 87.324 (shoulder 2) levels that have formed the inverted head and shoulder pattern (which is bullish in nature), as a result, CADJPY intermediate bulls resume near wedge baseline and form bullish engulfing pattern candle at 88.977 levels on weekly plotting.
Subsequently, the current price has spike well above DMAs and EMAs. For now, expect more rallies on bullish DMA crossover.
Contemplating and synthesizing these chart and candlestick patterns, coupled with the fact that the intermediate trend has gone in the uptrend again, and the sharp rallies at the wedge support, in addition, indicates the strength in this pair.
Most importantly, both the leading oscillators (RSI & stochastic) on both daily and weekly timeframes have been converging upwards to the ongoing price rallies.
For now, the major resistance at 89.810 levels and supports are observed at 89.662 and 89.049 levels, the break out of these levels would determine the next trend directions.
On a broader perspective, the prices are now attempting spike above EMA again and head towards wedge resistance with healthy bullish momentum, thereby, one could expect more rallies.
To substantiate this bullish stance, MACD on daily terms has also shown bullish crossover to signal the extension of the uptrend.
It is wise to buy one touch binary call options (strikes at 89.885 levels) and simultaneously, initiate longs in futures contracts of near month tenor on hedging as well as trading grounds. With this leveraged product one can add magnified impact on the trade yields.
Currency Strength Index: FxWirePro's hourly CAD spot index is displaying shy above 110 levels (bullish), while hourly JPY spot index was inching higher towards -41 (bearish) while articulating (at 06:40 GMT). For more details on the index, please refer below weblink:
As you could see higher bullish sentiments in CAD and the bearish interest in JPY, the bulls of this pair are most likely to extend rallies as per our above stated technical rationale.
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