Cross-Eyeing: CAD/JPY – Trade Closed

crosseye chart

Trade Update: 2007-01-09 01:30:00

The second half of our postion was closed out at breakeven as the pair moved up further to our entry point at 101.30. It looks like loonie is getting a push as cold weather is forecasted in the near term in which we may see a demand in energy and oil – good for the oil correclated CAD. Also, the Yen rally seems to be stalled tonight as Japanese traders take off for the holiday. So, we got +70 pips from the first half and +00 pips from the second half… Not bad!

Trade Update: 2007-01-08 13:40:46

It looks like CAD/JPY has hit 100.60 since our last update, so half of our position was closed for +70 pips. Please move stop on the second half to breakeven to create a risk free trade, and we will target 100.00

With carry trade liquidation and central bank reserve diversification on the minds of traders, our position looks to have a pretty good chance of hitting out target. My only concern is if weather starts to cool off or OPEC cuts off production further, we may see oil prices rise creating a hurdle for our position. We’ll just have to wait and see, but for now we’ve locked in +70 pips and we’re gonna let the rest of our position ride! Stay tuned!

Trade Update: 2007-01-08 02:30:46

It’s been a wild ride for our Cross-Eyed trade as positive numbers out of Canada pushed our trade to go from open, down to +105 pips, back up to only +15 pips. We are currently up +61 pips at 100.69. I will look to close half of my position at 100.60, and move the stop to break even on the second half of my position. Stay tuned for more updates!

crosseye chart

Trade Idea: 2007-01-04 13:47:46

I’ve been watching CADJPY for a while, and it looks like the downtrend in this pair is back in play. Last night, the markets saw a strong accumulation of Yen on unwinding carry trades. We will probably see this continue, especially since the Yen has been looking oversold and undervalued for a long time. Also, in the line up this month, the Bank of Japan will come to a decision on interest rates, which is currently sitting at 0.25%.

On the Loonie side of the pair we may see a continued drop in to value of oil worldwide, and with oil being one of Canada’s main exports, this drop in oil may correlate with a drop in the Canadian economy and the loonie. Oil prices may continue to drop because of the unusually warm weather, which has lowered the demand for oil and energy.

Also, because Japan imports most of it’s oil, a drop in oil price should help the Japanese economy and the value of the Yen.

We’ve built up a strong case on a long term CADJPY short, so here’s the trade idea:

Short CADJPY at market(currently 101.30), stop at 102.50, pt1 at 100.00, pt2 at 98.50

Remember to never risk more that 1% of your account on any single trade, so please adjust your position sizes accordingly.

This is a longer term trade idea, so I will update periodically throughout the trade. Good luck and good trading!

  • CanadaGold

    There seems to be a consistent drop in the USD/CAD btween 2am and 5:30am EST. If you take the the EOD number add +10 then entry short/sell it overnight with a limit of 20-30 pips , its a nice momentum trade. Make sure the intraday momentum is above 80% before calculating the +10. Wake up to profits.

  • CanadaGold

    There seems to be a consistent drop in the USD/CAD btween 2am and 5:30am EST. If you take the the EOD number add +10 then entry short/sell it overnight with a limit of 20-30 pips , its a nice momentum trade. Make sure the intraday momentum is above 80% before calculating the +10. Wake up to profits.