I’m seeing tighter consolidation on these short-term triangle patterns on EUR/JPY and USD/CAD.
Better be ready for these breakouts when they happen!
EUR/JPY: 1-hour
First up this ascending triangle pattern forming in the middle of EUR/JPY’s uptrend.
The pair is currently testing the triangle resistance, still deciding whether to make a bounce or a break. So where might it head next?
Technical indicators are looking mixed for now, as the moving averages are hinting at a potential bullish breakout. If that happens, EUR/JPY might be in for a rally that’s the same size as the formation or roughly 200 pips.
On the other hand, Stochastic is reflecting overbought conditions, so the oscillator heading south could take the pair back down to the triangle support near 144.50.
Stronger bearish vibes might even lead to a breakdown, but the 100 SMA and 200 SMA dynamic support levels are near the bottom to add to its strength as a floor.
Just make sure you keep an eye out for long green candlesticks closing above the 145.50 minor psychological mark if you’re planning on going for a bullish break.
USD/CAD: 1-hour
Next up is this neat symmetrical triangle on the hourly chart of USD/CAD.
Price is bouncing off the resistance while Stochastic is heading south, so we might see more downside until the triangle support near the 200 SMA dynamic inflection point.
The 100 SMA is still above the 200 SMA to signal that the path of least resistance is to the upside or that support is more likely to hold than to break.
In that case, another move up to the triangle resistance might follow soon. Besides, the pair is coming from a pretty steady climb over the past few days, so bulls could have the upper hand.
Keep your eyes peeled for bullish candlestick patterns if you’re counting on the uptrend to gain traction soon!
