CAD/JPY has staged such a strong rally recently yet it seems to be reaching an exhaustion at the moment. In fact, a bearish divergence can be seen with price making higher highs and stochastic making lower highs this month.
Aside from that, the pair is testing the top of a symmetrical triangle forming on its 4-hour time frame. If the top of the triangle holds as resistance, the pair might be on its way back to the bottom or until the middle of the triangle.
Shorting at market with a stop above the triangle could yield a high return on risk if one aims for the bottom of the triangle around 94.00. Moving the stop to entry once price reaches the middle of the triangle somewhere close to 94.50 is a good way to protect profits.
By Kate Curtis from Trader’s Way