Partner Center Find a Broker

This pair’s short-term rising trend line has been holding like a boss so I’m hoping to catch a quick pullback and join the climb. Here’s my CAD/JPY trade idea.

Long CAD/JPY Setup

Cyclopip has had his eye locked on the pair’s rising trend line for quite some time and he made quite a killing on his recent long trade, so I’m looking to get a piece of the action as well. Price is already starting to pull back from its recent surge so I used the handy-dandy Fib tool to look for potential entry levels.

The 61.8% Fibonacci retracement level coincides with the trend line around the 86.70 area, but I’m thinking that the higher Fibs might already keep losses in check. After all, a bullish divergence is materializing as price made higher lows while stochastic had lower lows.

CAD/JPY 1-hour Forex Chart
CAD/JPY 1-hour Forex Chart

I haven’t set any actual entry orders yet since I plan on waiting to see how price reacts to the 86.70-87.00 area first. There’s not much in the way of top-tier reports from Canada or Japan this week so the major source of volatility might be the FOMC statement. The announcement could do a number on USD/JPY, which might then carry on to CAD/JPY price action especially if Yellen drops some hints on keeping rates unchanged for the next twelve months or so.

I’ll refrain from going long around the short-term trend line if long red candles form during the FOMC announcement, but I’m keeping a bullish bias on the Loonie because of last month’s OPEC output deal and the support from non-OPEC oil producers. The resulting pickup in crude oil prices could give a much-needed boost to Canada’s energy sector, contributing to business investment and employment down the line. I guess I’ll just have to watch out for larger corrections on the longer-term charts if price breaks below these Fibs.

Got any comdoll trade ideas you’d like to share? Post ’em right here! And don’t forget to check out our risk disclosure when taking any of these setups.

Cheers,

Happy

See also: Q3 2016 Trading Performance 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.