My max profit target was hit on my short-term play in CAD/JPY. Here’s a quick review and potential next move.
Downside Momentum in CAD/JPY
Last week, I decided to ride the momentum lower on CAD/JPY, playing the broad risk-off sentiment driving the markets last week. That sentiment continued into the weekend, driving CAD/JPY further lower as the rate of spreading for the Coronavirus was accelerating, prompting traders out of high-yielders and into the safe havens like the Japanese yen.
That sentiment continued this week for CAD/JPY (albeit a bit more muted than last week) and with the help of lower oil prices to drive the Loonie lower, CAD/JPY hit my max profit target at 81.65, set at November – December support area.
Total: +93 pips / +0.60% gain on 0.50% max risk
Overall, a very solid setup on both the fundamentals and technicals, that worked out well for a great R:R in just a few sessions.
Looking forward, with the PBOC injecting liquidity into the Chinese financial markets, it looks like traders are not so risk averse to start the week. So, it’s likely this may be the bottom in CAD/JPY for now, but I’m keeping my bearish bias as I think we still haven’t seen the peak fears of the Coronavirus story. As such, I’ll be looking out for both a pullback and a breakdown as opportunities to short CAD/JPY again, if the driving themes continue.
What do you guys think of this trade? Were you able to catch quick pips on the momentum lower as well? Let me know in the comments section below!
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