CAD/JPY
Commentary – We wrote last week that “the CADJPY thrusted through channel resistance Friday but the shooting star (candlestick reversal pattern) yesterday gives scope to a reversal.” The shooting star remains intact and a drop under trendline support, near 112.62 today (increases about 26 pips per day), would signal a reversal. We are looking for the CADJPY to make its way back to the former 4th wave just above 107.00. There is the possibility that this is a larger reversal. We are looking for the initial 5 wave decline on the daily and then the retrace in 3 waves to get bearish. This setup will likely take at least a few weeks.

Strategy – None

CHF/JPY
Commentary – Last week’s bearish engulfing candle suggests that a significant top is in place at 99.78. Weakness from there is likely the beginning of a bear wave that will extend to the potential channel support line near 92.00. Also, the 5 wave rally from 84.78 suggests at least a pullback to the former 4th wave at 94.28. Similar to the CADJPY, there is the possibility that a much more significant change in trend is taking place.

Strategy – Getting bearish on a pullback to 98.67/99.00, against 99.78, target TBD

NZD/JPY
Commentary – There are 5 waves down from 92.96 to 90.87 and a 3 wave setback from 90.87 to 91.78. Whether or not this is the complete A-B-C correction or just wave A of a more complex correction remains to be seen but as long as price remains below 92.96, we are looking lower. Short term measured objectives (bearish) are at the 100% extension of 92.96-90.87/91.78 at 89.69 and the 161.8% extension at 88.40. Wave 3 lower is confirmed on a decline below 90.87.

Strategy – Bearish now, against 92.96, targeting 89.69 and 88.40

Jamie Saettele is a Technical Currency Analyst for FXCM.