CADJPY back on the radar.

On August 16th, the CADJPY was our “Chart of the Day” and the pair was expected to develop the neckline of a possible longer term head and shoulder pattern. The pair did just that, but did a little more than expected. On that drop following August 16th, the pair fell to a low of the 84.67 level and bounced. The problem with this move is that created a “false breakdown” below the key 85.30 support and may have created a near term INVERSE head and shoulder pattern. If this pattern plays out we could rally towards the 88.50-89.00 level near term. With stocks at all time highs, the risk of a move higher from here is heightened.