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CAD/JPY: Forming an ABC pattern on the daily chart


CAD/JPY produced a bullish engulfing candle upon having a bearish correction on the daily chart. The chart produced the candle at a level where the price found its support earlier as well. Thus, the daily buyers, as well as intraday buyers, are going to keep their eyes on the pair to go long. The H4 and the H1 chart look good for the buyers as well. Let us now have a look at these three major charts.

Chart 1 CAD/JPY Daily Chart

The chart shows it made a bullish move upon producing a bullish engulfing candle around 75.000. The price headed towards the North having a rejection at 76.815, and remained bearish for two candles. It then had a bounce around 75.850 and produced a bullish engulfing candle. The level of 75.850 has been a significant level, where the price had a bounce several times earlier. The price may find its next resistance around 76.815. Since the daily chart is forming an ABC pattern, it may breach the level and make a new higher high.

Chart 2 CAD/JPY H4 Chart

The chart shows that it headed towards the North upon producing a bullish engulfing candle at 75.550. The price had a rejection at 76.510. It has been in consolidation. The level of 76.305 may hold the price as a level of support. If the chart produces a bullish reversal candle, the buyers may go long above 76.510. The price may find its next resistance around 76.800. On the contrary, if the price makes a bearish breakout at 76.305, it may find its next support at 75.880.

Chart 3 CAD/JPY H1 Chart

The price after being bullish had a rejection at 76.510 twice. The level of 76.305 has been working as a neckline. If the level is breached by a bearish candle, the sellers may go short in the pair and drive the price towards the South with good bearish momentum. The price may find its next support at 76.000. On the other hand, the level of 76.305 is a flipped support, which may attract the buyers to go long upon a bullish reversal candle followed by a breakout at 76.510. The price may find its next resistance around 76.700.

These three charts look good for the buyers. Thus, the pair may have a bullish day today. If today’s candle closes above the last higher high, the pair may remain bullish for several days.

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Source: https://www.eaglefx.com/news/cad-jpy-forming-an-abc-pattern-on-the-daily-chart/
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