Forex Blog

First-hand Forex trading experience and information about foreign exchange market that will be useful to traders

Archives

Double Top on CAD/JPY Daily Chart

January 15, 2017 (Last updated on January 25, 2017) by Andriy Moraru

I am presenting yet another pattern with the Canadian dollar in the main role. The double top on USD/CAD is still a pending one, while the USD/CAD channel is already trading. The double top on CAD/JPY is a bit different in the sense that it is bearish for CAD, not for the other currency. In this case, a successful breakout from this double top will cause the Japanese yen to appreciate versus the loonie.

The pattern tops a very strong rally that CAD/JPY was experiencing from early November through mid-December 2016 after breaking away from the symmetrical triangle. It has a downward slope and is interesting because a successful bounce from the neckline would confirm a descending channel formation, which is a bullish continuation pattern.

The double top is shown using two yellow lines on the chart below. The upper one marks the tops, while the lower one shows the neckline of the formation. My entry level is attached to the cyan line running in parallel to the border; it is located at 10% of the pattern’s height below. The green line represents my take-profit level, which is positioned at 100% of the same distance. I will exit using a stop-loss placed at the high of the breakout candle. If the breakout candle’s body is significantly below the border, I will use the previous candle for the same purpose. I will ignore bullish breakouts from this formation.

CAD/JPY - Double Top Pattern on Daily Chart as of 2017-01-15

I have built this chart using the ChannelPattern script. You can download my MetaTrader 4 chart template for this CAD/JPY pattern. You can trade it using my free Chart Pattern Helper EA.

Update 2017-01-23: The trade triggered today at 5:55 GMT. My entry price is 85.341, stop-loss is set to 86.384, and the current take-profit is at 82.855.

CAD/JPY - Double Top Pattern on Daily Chart as of 2017-01-23 - Post-Entry Screenshot

Update 2017-01-25: The trade has hit stop-loss yesterday at 16:59 GMT. The pullback was quite fast with this one:

CAD/JPY - Double Top Pattern on Daily Chart as of 2017-01-25 - Post-Exit Screenshot

If you have any questions or comments regarding this double top on the CAD/JPY chart, please feel free to submit them via the form below.

Leave a Reply

required
required (will not be published)
optional