Trade Closed: 2010-09-23 4:31
Eeep! Looks like I won’t get my turkey after all! Canada’s retail sales came out worse than expected, and the Loonie bulls finally caved in to the pressure to dump the currency. It’s just too bad that I got triggered first! The pair spiked right up to my entry price just before it went on its merry way down. Awww geez, I probably should’ve placed my buy stop order a little higher, maybe at 83.15 or 83.20. Good thing I was able to cut my losses early. After the release of the report, I immediately closed the trade at 82.45.
Oh well. I guess I’ll just have to move on to my next trade next week. In the meantime, I think I’ll get myself a large tub of strawberry ice cream with syrup. Yum!
P/L: -65 pips / -0.72%
Trade Idea: 2010-09-22 1:31
My trading recipe this week features a delicious long order on the Loonie against the yen. Okay, maybe Canada has been popping a few economic eyesores lately, but the future looks promising!
Aside from the Loonie hitching a ride up the charts with the other comdolls, many forex geeks believe that the retail sales report today will clock in with better numbers. This is probably because the huge improvement in employment trumps the slight dip in consumer spending. Hah!
I also think that the traders will treat the yen like bad milk for a while. After all, with USDJPY slipping below 85.00 again, who wants to risk buying the yen when there’s a possible BOJ intervention looming just around the corner? Ack!
CADJPY’s 4-hour chart shows that the technicals are lined up with my fundamental outlook. There’s a falling wedge right on top of the current uptrend and this is usually considered as a continuation signal. The pair found support at the 38.2% Fib level and, judging from the oversold stochastics, it could bounce soon. Plus, that bullish divergence there is like cherry on top of a strawberry sundae!
With all these signals lining up, I have a really good feeling about this trade. I don’t want to be too hasty and just go long at market though. I’ll wait for a bit of upward momentum first and, once the pair breaks above the falling wedge, that’ll be additional confirmation for me to go long. I’m targeting the previous high around 84.00 and the area of interest around 84.60. I placed my stop below the 50% Fib level and that’ll give me a nice 1:1 risk-to-reward ratio on my first position.
Here’s my plan:
Long CADJPY at 83.10, stop loss at 82.20, pt1 at 84.00, pt2 at 84.60. As usual, I’ll risk 1% of my account on this trade.
Stay tuned for my updates on MeetPips.com!