CAD/JPY
Commentary – The CADJPY thrusted through channel resistance Friday but the shooting star (candlestick reversal pattern) yesterday gives scope to a reversal. We wrote last week that “wave 3 in the 5 wave advance from 97.50 is extended. When wave 3 is extended, wave 5 often ends close to the 61.8% extension of waves 1 through 3. In this case, that point is 114.32. 114.32 intersects with channel resistance on 6/2 (which is Saturday…so watch next Monday).” We know by now that 114.32 did not hold but the level is close enough to Friday’s high to warrant significance. A reversal is signaled by a drop below channel support, currently at 110.56 (increases about 20 pips per day).

Strategy – None

CHF/JPY
Commentary – From last week, “The CHFJPY remains entrenched in the 5th wave of a 5 wave rally that began at 84.79 in June 2005. The 5th wave has formed a well defined channel and a daily close below this channel would indicate additional bearish potential. Fibonacci measurements suggest that additional upside potential remains. The 161.8% extension of wave 1 (84.79-93.17/87.67) is at 101.24. The 61.8% extension of waves 1 through 3 (84.79-98.09/94.27) is at 102.41 and wave 5 (beginning at 94.27) would equal wave 1 at 102.65.” However, the break above 99.49 is from a triangle (visible on intraday charts) and triangle breakouts are terminal. A reversal could occur at any moment. A break below the mentioned channel support, near 98.83 today, would warrant a bearish bias. The line increases about 5 pips per day.

Strategy – None

NZD/JPY
Commentary – We wrote last week that “the NZDJPY is trying to break higher from a month long consolidation. Remaining above 87.55 keeps the bullish structure intact. Fibonacci measurements are above 92.00. The 161.8% extension of 79.25-85.17/82.56 is at 92.23 and the 61.8% extension of 79.25-89.06/86.69 is at 92.74. The 1990 high is at 92.84.” Price hit 91.79 today before backing off. The rally from 86.96 does not look complete. The current weakness is a 4th wave correction. Support should be strong at the 38.2% of 87.55-91.79 at 90.17. A 5th wave rally is expected to test the mentioned objectives following this consolidation. Coming under 89.08 indicates additional bearish potential. Due to the fact that the ‘meat’ of the move is over, we are no longer bullish.

Strategy – None

Jamie Saettele is a Technical Currency Analyst for FXCM.