FxWirePro: CAD/JPY misses evening star but back-to-back shooting star and gravestone evidence dip, intermediate bears resume exactly at wedge resistance

Chart and candlestick pattern formed - the Shooting star, gravestone doji at 88.691, 88.698 respectively (on daily plotting) and rising wedge pattern (on weekly plotting).

It has just been omitted an evening star candlestick pattern on the gravestone doji occurrence in between shooting star and a bearish candle with the big real body (on the daily chart). Otherwise, the price pattern has formed all features of evening star pattern (the previous trend being the uptrend, followed by bullish candle and gap-up opening – small real body candle – gap-down opening and bearish candle).

Contemplating and synthesizing these chart and candlestick patterns, coupled with the fact that the intermediate trend has gone in the downtrend, and the failure swings at the wedge resistance, in addition, indicates weakness in this pair.

Most importantly, both the leading oscillators (RSI & stochastic) on both daily and weekly timeframes have been converging downwards to the ongoing price dips.

For now, the major supports are observed at 87.799 and 87.458 levels, if bears manage to break these levels, and the sustenance below would likely to evidence more slumps upto 86.759 levels where the next strong supports are observed.

On the flip side, the stiff resistance is at 88.0313 (i.e. 7DMA levels).

On a broader perspective, the prices are now attempting slide below 21EMA levels (i.e. 1578 levels) and head towards wedge baseline, thereby, one could expect more slumps as both the leading oscillators have been constantly converging downwards to signal weakness (refer monthly chart).

To substantiate this bearish stance, MACD has shown bearish crossover to signal the extension of the downtrend.

Trade tips:

It is wise to initiate shorts via tunnel spreads options strategy with upper strikes at 88.0313 and lower strikes at 87.560 levels, we advocate shorts via this leveraged products that are likely to add magnified impact on the trade yields.

Currency Strength Index: FxWirePro's hourly CAD spot index is displaying shy above 0 levels (neutral), while hourly JPY spot index was inching higher towards 119 (bullish) while articulating (at 06:10 GMT). For more details on the index, please refer below weblink:

http://www.fxwirepro.com/currencyindex

As you could see bullish interest in JPY, the bears of this pair are most likely to extend slumps upon our above stated technical rationale.

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