CAD/JPY
Commentary – We wrote last week “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.” Obviously, a top was not in place. This is why we wait for at least a small 5 wave decline before getting bearish. Upside potential looks limited, especially considering the near term outlooks for both USDCAD and USDJPY. Support is at the 6/8 low of 113.42. We have updated the count to show that wave 3 is extended and a period of consolidation/pullback should occur in wave 4 before a rally to a new high in wave 5.

Strategy – None

CHF/JPY
Commentary – We speculated last week “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.” The CHFJPY fell below 98.00 within 5 days but price has come right back. The larger bearish outcome is still possible as long as 99.78 remains intact. A rally through there gives scope to a test of the resistance line drawn off of the December 2005 and January 2007 highs, just above 100.00

Strategy – Bearish, against 99.78, target TBD

NZD/JPY
Commentary – NZDJPY has skyrocketed to fresh highs. The next potential resistance point is where the rally from 77.42 would equal the 68.19-85.84 rally. Watch the resistance line drawn off of the May 2006, September 2006, and January 2007 highs. This line is near 94.50.

Strategy – None

Jamie Saettele is a Technical Currency Analyst for FXCM.