CADJPY displays a daunting Head & Shoulder's Top very similar to what we see in USDJPY . The major pairs always have more trickery involved to some degree and Dollar Yen has been a nervous, noisy trade the last several days. In contrast, CADJPY has been a cleaner tell as to what's really going on in global macro.
CAD is a commodity currency and therefore often reflects the sentiment of crude oil and gold , among others. Last week's report revealed record long positioning in front month Crude contracts. The crowd is usually wrong, unfortunately. Further, I was reminded the last few days that the S&P 500 "Is always long Crude." In other words, a breakdown in CADJPY could foretell a breakdown in Crude and thereby a breakdown in US equity indices.
I'm not sure what came first; the chicken or the egg. Certainly there are many other factors at play in creating this very H+S formation other than my simpleton takeaway. However, given the CADJPY correlation to other major currencies that effect US equity markets - I think a triggered formation here has grave implications for US equity bulls.
Keep an eye on the pair as a leading indicator for now. Anything can happen and the risk/reward isn't there to justify a short entry just yet (at least not a full position imo ). Think of CADJPY as a proxy for USDJPY with cleaner price action in the current market environment (these things change over time).
Good luck out there, keep 'em tight!