CAD/JPY â�,�“ We remarked last week that â�,��"The rally from 101.56 is choppy and as such is considered corrective in nature.  Additionally, RSI is declining from above 70 â�,�“ this favors a return to the downtrend that began near 106.00â�,�.  The decline has resumed and price is now testing the 7/11 low at 100.57.  A daily close below this support area would bolster the bearish case.  Moving averages are aligning for an extended downtrend as well (see chart below).  However, the downside may be limited at the current juncture due to oversold daily oscillators (for the first time since April 2005) and the appearance of 5 waves down from 105.99.  If a correction plays out, then resistance is at the 11/28 high at 102.98.  The next downside target would be the 5/23 low at 99.22.

CHF/JPY â�,�“ Since May of 2003, the CHFJPY has traced out a 5 wave ending diagonal pattern.  The pattern often ends with a thrust through the top of the resistance line towards a level that is related in a Fibonacci multiple to the widest portion of the triangle.  In this case, the Fibonacci levels are 97.24 and 100.41.  Last Friday, the pair vaulted to 96.98 before declining to current price.  Todayâ�,��"�s decline reversed at the open chart gap from 11/27 â�,�“ suggesting that additional gains to the measured objectives of 97.24 or 100.41 are possible.  A decline below the 8/30 high at 95.65 would begin to instill confidence in the downside.  Daily RSI has recently declined below 70 as well â�,�“ which is suggestive of a top.  Rarely though does top tick in price match top tick in indicator thus one more rally to exceed 96.98 and create a divergence with RSI should be considered.

NZD/JPY â�,�“ The NZDJPY has ranged between 77.37 and 79.68 since the beginning of October â�,�“ tracing out what may be a distribution top.  Reinforcing the idea of a topping out is the decline today off of the 61.8% of 87.06-67.76.  A break below 77.37 would argue that a top is in place at 79.68 and focus would then shift to the 9/8 low at 73.97.  If 79.68 is exceeded, then the topping scenario is negated (at least temporarily) and resistance would be at the 2/3 high at 81.95.

Jamie Saettele is a Technical Currency Analyst for FXCM.