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Week Ahead: CAD/JPY to Resume Uptrend?

Last updated 4/10/2009 1:34 PM EST (GMT -5) 0 Comments - Add your comment

We'll be keeping an eye on a bullish 2hr Gartley pattern setting up on the CAD/JPY in order to trade with the overall uptrend we've seen developing since late January. The ideal point of entry would be the 78.6% of XA and 161.8% of BC convergence near 78.5. We also have a 127.2% ABCD extension pattern projected to complete near this level, however, the AB=CD pattern is projected to complete near 61.8%/127.2% fib convergence near 79.5-79.32. Either of these levels come in around daily bull trendline support adding a bit more confirmation.

There's still plenty of room down as prices currently meandering around 81.5, so we'll hold off on specific entries/exit in order to assess price action if prices do indeed drop. Point C (currently near 78.6% of AB at 82.17) must remain the top for this bullish setup to remain valid as a move above this level, and especially above point A at 82.86, suggests the bullish continuation is already in progress.

That said, a more aggressive approach would be to short at current levels with stops placed above point C looking to take profit just above potential bullish Gartley pattern completion near 79.5 and/or 78.5. We will remain on the sidelines for now and instead look to establish a long position if prices do in fact dip to pattern completion.


Daily Chart - Room down to bull trendline support	2min Chart - Bullish Gartley Setting up to complete near either point D

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