Head and shoulders pattern forming?
The closely-watched head-and-shoulders pattern in AUD/USD has continued to flatline but here’s a new spot to watch.
CAD/JPY has been a great trade this year but it’s beginning to look tired. It made a new high in late-March but there’s been now follow-through.
Ultimately, this could be a speedbump in the reopening trade but it could also turn into a head-and-shoulders top, which would target a deeper retracement to 84.00.
Normally I would brush this one off but the uncertainty on a bunch of different charts, including oil and bonds, is somewhere to watch. Stocks are breaking out but the confirmation isn’t there.
I struggle to see what would derail this short of some disastrous covid news or Powell talking taper but the charts are flagging risks.