Fundamentals
For a long time CAD/JPY has been caught between two countervailing forces as the decline in loonie was offset by the rise in USD/JPY leaving the cross to putter along the 94.00-96.00 channel. But changes may be coming soon to the pair as the price of oil continues to drift lower putting fresh downward pressure on the Canadian dollar. If crude were to crumble below the $40/bbl mark USD/CAD would likely rise to 1.3000 while the Fed would not be able to hike rates in such a deflationary environment sending USD/JPY below 120.00 figure. The one two punch combination of such a scenario would send CAD/JPY back to a test of 92.00.

Technicals
Technically CAD/JPY has developed a clear double top at the 96.00 level and that distribution now signals a break lower towards a test of the 92.00 double bottom.