FxWirePro: Who will win in tussle between CAD/JPY’s hanging mans, shooting stars, hammer and dragonfly doji patterns?

On daily plotting of CADJPY: Hammer spikes off rallies above DMAs but the flurry of bearish patterns at stiff resistance counter-rallies, can bulls drag rallies on shrinking momentum?

Hammer candlestick patterns have occurred at 82.529 and 82.678 levels, as a result, the bullish patterns have taken off sharp rallies above 7 and 21 DMAs upto the stiff resistance of 85.723 levels.

That is where shooting star and the hanging man followed by bearish engulfing pattern candlesticks have popped up to counter back bullish rallies, consequently, steep slumps are observed upto strong support at 84.222 levels.

At that juncture, sharp dragonfly doji pattern candle has occurred at 84.526 levels to bounce back again. Currently, again hanging man patterns are appearing at the stiff resistance zone of 85.204 levels.

While both momentum oscillators are indicating the shrinking bullish momentum.

On a broader perspective, the major downtrend has gone in the consolidation phase since December 2015 (refer monthly plotting for range-bounded trend). Shooting star pattern has occurred at 83.969 levels hampers previous bullish momentum on this timeframe.

Trade tips: Well, on hedging grounds, we’ve already advocated shorting futures contracts of mid-month tenors. We like to maintain the positions as the underlying spot FX likely to target further southwards 83.500 levels in the medium-term.

Writers in a futures contract are expected to maintain margins in order to open and maintain a short futures position.

Currency Strength Index: FxWirePro's hourly CAD spot index is inching towards 72 levels (which is bullish), while hourly JPY spot index was at -101 (bearish) while articulating (at 13:01 GMT). For more details on the index, please refer below weblink:

http://www.fxwirepro.com/currencyindex