Trade Closed: 2007-05-24 23:59
It looks like I adjusted my stop a little too early. After a 20 pip move up from entry, I adjusted the stop from 111.85 to 112.05. Soon after, the pair retraced down once again to close out our position for a 20 pip loss on half a position. 112.00 proved to be a strong support area as the pair has rallied to it’s currently level around 112.80….. Doh!!!
Half position: -20 pips
Trade Update: 2007-05-23 12:35
As we wrap up the Euro trading session, I’d like to update our position in CAD/JPY. We were triggered half our normal position size at the beginning of the US trading session. The pair retraced soon after Canadian leading indicators came inline with expectations at 0.4%, but the pair found support at 112.00 before treading higher as the market’s appetite for risk grew.
Currently, the pair is trading slightly above our entry price around 112.30 after making a high of 112.40 so far for the day. I will just make one trade adjustment here. The pair moved up about 20 pips from entry, so I will trail our initial stop by moving it up 20 pips from 111.85 to 112.05.
Trade Idea: 2007-05-22 22:54
It looks like the Loonie is taking breather today as price action has been consolidating against the Yen over the course of the last trading session. I still think the Loonie will remain strong, especially if crude prices rise as the U.S. is expected to have a busy driving and hurricane season, so I will stay long biased on CAD/JPY. It doesn’t hurt to have a positive interest rate differential going long as well
There is downside risk as some market players are beginning to speculate a rate hike out of Japan. Of course, a Yen rally will spark a carry trade unwind, but as we have seen in the most recent past, carry trade unwinds don’t last very long. So, in the case the pair sells off, I will long for a nice price level to jump in long.
On a technical note, stochastics are dropping on the 4hr chart as prices continue to consolidate. This is telling me that buyers are still in control and we should see a jump to the upside as market players jump back in.
We do have event risk later today with Canadian Leading indicators out at 08:30 am EDT, with the forecast to come inline with the previous month at 0.4%. Watch out for that.
Here’s our long trade idea:
Long half position CAD/JPY at 112.25, stop at 111.85, pt at 112.75
Long half position CAD/JPY at 110.90, stop at 110.60, pt at 111.40
Remember to never risk more than 1% of your account on any trade, so please adjust your position sizes accordingly!
Good luck and good trading!