Pick of the Day: CAD/JPY – Trade Closed

Trade Closed: 2007-05-20 21:30

Just a quick review from our trade on Thursday in which we were long CAD/JPY. April inflation data did come out stronger than expected which boosted the Loonie, but we hit a stumbling block on Friday as China widened the trading band for the Yuan. This proved to be more of a buying opportunity for the pair than a Yen rally as traders jumped back in soon after the announcement to sell more Yen and purchase riskier assets.

So, our trade reached full profitability. I hope everyone did well on this trade!

Total: +50 pips

Trade Update: 2007-05-17 07:55

Canadian CPI came out today with stronger than expected April inflation data. Headline came in at 0.4% and the core number at 0.2%. This boosted the Loonie against the majors and we saw our long trade triggered at 110.00. Unless we see a global risk reduction and the buying back of Yen, this trade should hit its target.

I had the stop for this trade posted at 109.30, which was a mistake. Please adjust the stop at 109.80.

We will trail this stop, so please stained tuned for updates! Good luck!

Trade Idea: 2007-05-17 00:42

Pick of the Day

Good morning! Well, we just saw a slightly weaker GDP number out of Japan and the Bank of Japan’s decision to keep interest rates at the low 0.50%. This is not very supportive of the Yen, so we look to sell the Yen against one of the better performing currencies as of late – the Canadian Dollar.

Now, the pair is consolidating at the moment, but I am very confident the we will see it continue to rally as strong Canadian data continues to support the Loonie.

We do have Canadian CPI out later today, and a higher inflation number will continue to support the speculation of interest rate hikes in Canada or a weaker number will give traders an excuse to take profits on the Loonie run. I will look to buy above the previous high, or if a weaker number causes a selloff.

Even if the pair sells off I think it will be an opportunity to buy as the positive carry of holding long positions will support the pair.

Long half position CAD/JPY at 110.00, stop at 109.80, pt at 110.50

or

Long half position CAD/JPY at 108.50, stop at 108.20, pt at 109.00

Please remember to never risk more than 1% of your account on any position, so adjust your position sizes accordingly!

Good luck and good trading!