CADJPY: Breakout or Reversal?

[B]My picks:[/B] CADJPY (Pending)
[B]Expertise:[/B] Global Macro, Classic Technical Analysis
[B]Average Time Frame of Trades:[/B] 1 week - 6 months

To update the pick from Monday, CADJPY is now testing the upper threshold of resistance marked by the 87.50-88.85 congestion area and a rising channel top. A daily close above 88.85 opens the door for a rally all the way to 96.48, the long-term support that held up prices from October 2005 to September 2008. That said, candlestick positioning reveals a Shooting Star, hinting that a bearish reversal is the preferred scenario going forward. A turn in risk sentiment would als be supportive of Yen strength. If prices indeed bounce lower, we will remain on the sidelines and look for a drop towards the channel bottom (which by then should be roughly near 83.00) to enter long.