Who’s ready to trade the Canadian CPI release later today?
If you are hoping for a breakout, this CAD/JPY chart pattern is worth watching.
On the hourly chart below, you can see that the pair has formed slightly higher lows and higher peaks to consolidate inside the rising wedge formation.
Canadian Dollar/Japanese Yen 1 Hour Forex Planned by TV
uniformity looking truly Tight now, which means a breakout will happen soon.
A move below wedge support and the key psychological mark 109.00 could be enough to confirm the Canadian bears’ victory in the round, which could lead the CAD/JPY to the next bearish targets.
The shape of the graph now spans about 200 pips in height, so the resulting breakdown may be of the same magnitude. Sellers may also book profits at Pivot (108.21) or S1 (107.33).
Stochastic appears to be in favor of a bearish move, as the oscillator is already signaling overbought conditions and may be ready to head south.
Of course the direction of the breakout can largely depend on the outcome Canadian CPI report for Maywhich is set to show a decrease in price pressures.
If this is the case, the Canadian currency could suffer a sharp drop as weaker inflation could dash hopes that the Bank of Canada will raise interest rates in its next statement.
On the other hand, stronger than expected CPI data and the breach of the first resistance barrier (109.87) near 110.00 could invalidate this setup.
Which way do you think the CAD/JPY might break out?
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