CAD / JPY strengths:
Much of the volatility in the FX market has been erratic, but in some places there are still some nice technical sequences to watch out for. CAD having had a big breakdown against USD trades relatively well, which brings us to CAD /JPY despite the volatility of prices in JPY.
The CAD / JPY on the hourly chart sets up a fairly consistent model like a bearish flag. It is currently on the lower parallel of the model, but with a breakout of 7529, the bearish implications of the model should start to materialize.
The stopper on these types of patterns is generally better placed sufficiently inside the pattern, in this case, around 7700 could be a good place. Looking lower towards potential targets, support is first 7386, followed by the 2011 low at 7215, then if things really turn south, the 2009 low at 6837.
Remember to keep risk under control during these extraordinarily volatile times by trading with a size smaller than normal. And as always, be disciplined with stop losses.
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CAD / JPY daily chart (pointed below)
CAD / JPY hourly chart (bear-flag)
*** Updates will be provided on the above and other reflections in the business / technical outlook webinars held at 10:30 GMT on Tuesday and Friday. If you are looking for ideas and feedback on how to improve your overall trading approach, join me on Thursday each week for the Become a better trader webinar series.
— Written by Paul Robinson, market analyst
You can follow Paul on Twitter at @PaulRobinsonFX