Some weeks back, when oil started to crash, it took quite some time for the traditional oil play in the FX market to play catch-up. Much to my frustration, CAD/JPY hung around 105 for what seemed like an eternity before it eventually followed oil lower.

Yesterday we saw the CAD/JPY reversal pick up momentum quite sharply, in fact it led the way initially against the oil price. That tells me that profit-taking was the main factor at play. Many of the big macros will have been short this pair and if/when they start buying back, the market will move sharply.