CAD/JPY: A perfect rounding bottom pattern suggest us to buy
|Overview: The bulls are rocking on every time frame including daily, weekly, and monthly charts where only bulls are traceable. Since the starting of June month bulls are taking the charge and pair is rising up continuously from 78.00 to 80.54 level which is a massive bullish storm from an intraday point of view. Also, bulls managed to sustain above 80.00 level which is providing strength to the bulls.
Pair is making successively higher highs and higher lows on day to day basis. The way bulls are heading the north side it seems like they are trying to arrive 83.00 and 85.00 level in the near term.
Technical Analysis: From technical prospective we can see that pair has given us valid breakout of the symmetric triangle which is providing us a bullish signal and on 1st June it also breached a very strong resistance level of 78.20 which can’t be ignored and bulls are doing their best to pull it upside.
Also, a perfect rounding bottom pattern is in process of formation which is also providing a bullish signal with a very balanced demand and supply and favoring the bulls. The overall pair is trading above all the major and minor EMA lines which are providing us a bullish signal. A short term uptrend line is also providing strength to the bulls on 4 hourly chart from where bulls are getting demand pressure.
Odds are in favor of bulls and we will keep our view bullish on the pair as long as 78 level remain intact on the closing basis The 78.00 level can be considered as key support level followed by 77.00 level whereas 82.50 level can be considered as key resistance level followed by 85 level. On contrary, a steep downfall below 78.00 will change the outlook from bullish to bearish and we may see further downfall till 75.00 however there are very few chances for this event.
RSI just pocked the overbought territory and getting stronger on the daily chart which suggests some correction but this correction can be taken as buying opportunity. The MACD indicator is providing us bullish crossover of the zero line which is supporting the buyers.
Trade idea: Based on the chart and studies above we would suggest our traders and investors that go for buy at 80.00 level for the target of 82.50 and 85.00 with the tight stop loss of 77.50 level.
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