Our previous pick on CAD/JPY was triggered on June 16 and has subsequently reached our secondary target of 88. As a result, we are closing the trade at a profit and going neutral the pair.
The model we are following hints that prices may struggle a bit near current levels and begin another correction lower. It appears the pair is in the final stages of an upward impulse. Additionally, RSI is sporting divergence on an intraday chart, which is common at this point in the wave count.
If a correction develops, a common retracement may move back to 86.50. One possible scenario points to a retracement back towards our point of break out near 83.74. We cannot say for sure if the correction takes hold, but the bulk of the near term uptrend is behind us so we will await and see if a corrective dip lower develops and may reconsider another long position from lower levels.
CAD/JPY is sometimes used as a proxy for oil. Interested in our new quarterly forecasts for Oil and Japanese Yen, read them now.
---Written by Jeremy Wagner, CEWA-M
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USD/CAD Downtrend Still Eyeing 1.24 Target
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