Since 2014, CAD/JPY has been in a strong downtrend, which so far was interrupted by three major correction movements. All of them were very similar in terms of depth, having around 950-1000 pips. Two of them ended some time ago. The third one is happening right now. It is a bit too early to say if the third one is about to end this week or the next one but some technical signals suggest that we may expect a comeback to the long-term bearish trend relatively soon.
Apart from the fact that we just retraced around 950 pips, we also do have a downtrend line here (red). If the correction equality and a trendline is not enough for you, what about looking a little bit higher? 270 pips above (green line) we do have a 38.2% Fibonacci and a line being a support on the August 2015 and a resistance on the April 2016. Both places looks decent and seems ready for a potential bounce.
In such cases, all you should do is to wait. Wait for the price action on those potential resistances. If you will see a bearish reversal pattern on the first one, act. If not, wait for the second one. Act only if price action will suggest a reversal and remember that resistance is just a theoretical place where price can but does not have to bounce. Although breakouts are less probable, they do happen.
