Invictavis
Long

Potential Inverse Head And Shoulders Pattern on CADJPY

FX:CADJPY   Canadian Dollar / Japanese Yen
Hey all! I've been tracking a few pairs for a little while now waiting for them to 'cook' a little longer, and this is the first idea that has formed solid potential. What we see here is a potential inverse head and shoulders pattern on the daily chart that seems to have begun in late 2015. The price fell to form a new low forming the left shoulder, then rebounded and the 88.962 point which will act as the neckline in the scenario. Following the forming of the 'head' i.e. the new low, the price rebounded once again to the neckline thereby giving us more incentive to pursue this pattern. Assuming it goes to completion, I predict that its most likely target will be ~93.387 (marked by the blue line) due to it being a very strong S&R level that extends back several years. The only contention at this point comes from whether or not the 'right shoulder' is correct or if a new shoulder will form (hence the mildly transparent green arrows). Despite this, I'm quite confident in the overall structure and will be monitoring this closely.

Two setups are possible here.

Conservative setup:
Entry: 88.962
TP: 93.387
SL: 87.516

Aggressive setup:
Entry: 83.858
TP: 93.387
SL: 83.092

Good luck and always take the necessary precautions when trading!
Comment: Monitoring the formation of the second shoulder following the Canadian dollar's inability to rally.
Comment: Shoulder forming quite nicely where we expected it to form!
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