We have outlooked several promising Forex pairs and the result can surprise you!
CAD/JPY: there may be a pattern
Information is not investment advice
CAD/JPY has risen to 82.50 but met the resistance of the 50-day MA. The price action seen on the daily and weekly chart since the middle of July is so far corresponding to a bearish harmonic “Butterfly” pattern. The completion of the pattern implies the advance at least to the 84.00 area before the reversal to the downside. The recent advance above the September high, the 200-day MA in the 82.05 area as well as this year’s resistance line is in line with this scenario.
In the near term, consolidation may take place. The pattern will be valid as long as CAD/JPY is trading above 81.30 (100-day MA). The bullish scenario will get the ultimate confirmation on the break above 82.50. The first bullish target will be at 83.25 (July highs), while the next target will lie at 84.00.
This week, there are a few high-probability trade ideas I'd like to recommend to you. Trading these setups, be sure to implement a proper risk management approach.
On Thursday, the 2nd of February, the Bank of England will publish its report concerning interest rates and inflation data for the Eurozone. Professionals and investors anticipate that Andrew Bailey’s lead team of policy makers will likely raise interest rates to 4%; the highest in over a decade, for the tenth time in a row.
The first FOMC meeting comes after a buildup of anticipation from traders and investors alike, as the markets await what posture the Fed will take regarding the interest rates; would there be a hike or a cut in interest rates? Recall that the Federal Open Market Committee had previously ended the year 2022 with a 50bps hike, and an indication from Powell, the committee chairman, that the Fed could consider raising interest rates by 75bps in the course of the year 2023.