Partner Center Find a Broker

Thanks to the relatively downbeat BOC monetary policy statement, I’m thinking of taking another short Loonie forex setup. I’ve already got my eyes locked on a long-term NZD/CAD reversal play but I’m still having second thoughts because of the disappointing dairy trade auction. For now, I’m considering taking this shorter-term CAD/JPY play.

As you can see from the 4-hour forex chart below, the pair already broke below the neckline of the head and shoulders pattern, indicating that further losses are likely. Fundamentals support this since the BOC decided to lower their growth forecasts for the next couple of years, even though they still kept monetary policy unchanged.

CAD/JPY 4-hour Forex Chart
CAD/JPY 4-hour Forex Chart

With that, the pair is now back inside its previous range, which is around 250 pips in height. CAD/JPY still has around a couple of hundred pips to go before hitting the floor!

Stochastic has just reached the oversold area, though, so sellers might be looking to book their profits off their recent short positions soon. However, London session forex traders have yet to react to the pessimistic BOC statement, which means that there may be a bit more bearish momentum left.

Think I should go short at market or wait for a pullback to the broken neckline around 91.80 to 92.00? 

Cheers,

Happy time

Other Popular Articles:   

Comdoll Trading Kit Forex Trade IdeaWhat is the STA strategy?Q2 2015 in Review

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.