CAD/JPY
Commentary – All of the JPY crosses are in a similar position. It is clear that CAD/JPY is in a large 2nd wave (1st wave was the decline from 118.20-103.38). What is unclear is whether or not wace 2 is complete at 111.30. A more complex correction could be unfolding from the 103.38 low. Wave b of 2 could come under 106.66 before wave C of 2 advances towards potential reversal points of 112.54 (61.8% of 118.20-103.38), 114.33, 8/8 high, and 115.03 (78.6%). A cautious bearish bias is warranted against 111.30 since wave 2 could be complete there. Remember though that a decline below 106.66 could be wave b. The structure of the decline will determine whether or not wave 3 is underway.

Strategy – Flat

CHF/JPY
Commentary – Last week, we wrote that “if the rally from 92.15-97.21 was just the first leg of a more complex correction, then potential support is the 61.8% of that rally at 94.08.” The CHF/JPY declined to the 50% retracement at 94.68 before advancing, but correctively. However, potential remains for a drop below 94.67 in order to complere wave B of the correction from 92.15. A triangle could also be unfolding, in which case, price would range between 94.67 and 97.21 for most of this week before a break higher in a terminal thrust.

Strategy – Flat

NZD/JPY
Commentary – Different base currency, same pattern. The decline from 84.85 ended up being in just 3 waves, indicating that a more complex correction is unfolding from the 74.25 low. One more rally leg should lead to a test of the 61.8% of 97.74-74.25 at 88.77 before the larger downtrend continues. A test/thrust below 78.24 is possible before the rally towards 88.77 takes place.
Strategy – Bearish against 84.85, targets below 74.25

Jamie Saettele is a Technical Currency Analyst for FXCM.