RBC: Play An Ascending Triangle Pattern In CAD/JPY

Late on Monday RBC’s technical analysis team issued a recommendation going long CAD/JPY at Y109.10. They would look to add to the position on a dip to Y107.00. They target a move to Y113.00 and set a stop loss at Y106.10.

• They note that “the uptrend in CAD/JPY began to gather momentum in early March in response to a hawkish pivot from the FOMC.”
• “With the Ichimoku Cloud providing good support on pullbacks since then, the rally has stalled via the formation of a potential double top against Y110.24.”
• “The subsequent price consolidation has traced out an ascending triangle pattern since mid-September, with buyers more aggressive on each pullback.”
• “The uptrend in place suggests that pullbacks to support at Y107.43 and the ascending triangle base at Y106.25 (note that this is also flush with the Ichimoku Cloud base) should continue to attract buying interest.”
• “A daily close above Y110.24 would nullify the formation of a potential double top and complete the ascending triangle pattern.”
• “The completion of this continuation pattern would target Y111.13 initially, followed by an ascending channel top at Y112.33.”
• “The triangle pattern would have a measured move objective of ~Y115.90, with a daily close below Y106.25 required to nullify the uptrend.”