CAD/JPY is currently in an uptrend, forming higher highs and higher lows.
Prices are currently testing a key daily resistance at 78.368. Recent candles on the 1-hour timeframe are showing bullish rejections from this zone, indicating a possible move higher.
However there is scope for prices to create a leg lower and test the rising ascending trendline as illustrated in the image above. This will likely be the case if prices cannot sustain a break above that 78.368 level.
As mentioned in our latest CAD report (check: USD/CAD – The Worst Is Over) , the Canadian Dollar should continue its upside.
This is supported by rising Oil prices, continued economic policy packages from the Bank of Canada and a positive tone towards global economic recovery.
Potential Entry: When/If prices close above the 78.368 resistance level. It is important to make sure this break is sustained. An extended target could be 79.913.
Potential Stops: At around 78.173.
This trade carries a risk to reward ratio of around 2.00, with a maximum potential loss of 30 pips and a maximum potential gain of 65 pips. We strongly advise you place stop losses at entry once a trade is at least 15 pips in profit.
- Prices successfully reached all targets, with minimal drawdown on the trade. This trade is now complete at +65 pips. The extended target at 79.913 was also met at +140 pips.