Cross-Eyeing: Channel Play On CAD/JPY? – Trade Cancelled

The Canadian dollar was helped out last Friday by some good trade data figures, which came in better than expected.

This helped boost CAD/JPY up the charts, hitting my desired profit target.

However, I didn’t get triggered! Price dipped to around 82.60, about 10 pips above my entry point.

However, it seems as if the 50.0% Fib level held nicely, and the price reversed higher.

So even though the price seems to be approaching the bottom of the channel again, my trade idea is invalidated because my initial target has been hit.

While it’s annoying that I missed the move, I know these things happen and I just gotta roll it.

Trade Idea

Hey everybody, how y’all doing? After being so close (okay, not really) to making it three wins in a row, I got stopped out on my last trade.

I went through Big Pippin’s chart art earlier today, and I gotta say, I like that potential setup on the CAD/JPY. The pair has been trending higher within an ascending channel but is currently right smack in the middle.

Of course, if you’ve been reading the School of Pipsology, you’d know that this is no place to enter a trade.

With Stochastic still showing downward momentum, I think we could see this pair head lower and possibly test the bottom of the channel.

I popped on the Fibonacci tool to help me find a sweet entry spot, and it looks as if the 61.8% Fib lines up with the rising support line of the channel. This price level (82.45) also used to be a resistance level in the past. Could it serve as a support level now?

You might be asking, “Yo Cyclopip, why not take a short trade instead?”

Well, for fundamental reasons, I’m rather bullish on the CAD right now.

The Loonie’s hustle on the charts this week was partly fueled by positive reports, enabling it to remain steady against the dollar while its comdoll siblings have taken some hits.

Manufacturing is up, and even though housing data has been mixed, it hasn’t been a stumbling block for Loonie bulls.

I decided to put it up against the yen because the safe-haven currency seemed to have been MIA in this week’s trading, injured by disappointing reports on manufacturing.

Right now, it seems that if traders become risk-averse, they may fly back to the dollar rather than the yen.

I know that my trade is quite a ways off from my desired entry point, but with a potential Chinese rate hike and Canadian trade balance data on deck, I may see the volatility needed for my trade to get triggered.

Once again, here’s the gameplan:

Long CAD/JPY at 82.50, stop loss at 81.60, pt1 at 83.50

This gives me a stop of about 90 pips, giving me a roughly 1:1 reward to risk ratio for my first position. I placed my first profit target at 83.50, because it is the previous high, and could be in the middle of the channel in the event my trade is triggered and goes my way.

If that target is hit, I will move my stop to 82.50, giving me a risk-free trade, while letting it ride.

For now, I’m gonna grab a late-night snack. I’m thinking between popcorn, lasagna, or bunnies.

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