Thanks to the recent bounce in crude oil, this pair is holding on to the bottom of the long-term rising channel by the skin of its teeth. Should I just cut losses?
Long CAD/JPY Trade
I hopped in this long CAD/JPY position to catch a retest of the broken ascending triangle resistance before the longer-term climb resumes. However, crude oil had a really rough ride in the past few weeks that this pair dipped much lower than expected.
Fortunately I set a really wide stop on this one since I figured there were still several support zones close by and Loonie might just be waiting to charge at lower prices. So far, the ascending channel bottom on the daily time frame is able to keep losses at bay.
But for how long?
Stochastic is already indicating oversold conditions or that sellers are tired, and I’m also seeing a slight upward crossover that could mean it’s ready to pull up. In that case, the channel support might keep holding and CAD/JPY could be ready to get back on its uptrend from here.
Risk appetite appears to be returning to the markets and easing trade concerns leading up to the G20 encounter between Trump and Chinese President Xi could keep this pair supported.
Rising U.S. oil stockpiles remain a concern, but there are still speculations that the OPEC might curb output in order to boost crude oil prices. Russia’s unwillingness to take part has been a downer and Trump’s remarks on wanting to see oil lower aren’t helping either.
I’m inclined to just go with the flow on this one, but I’m also gonna be quick on my feet in case the pair dips below the recent lows. This might be enough to confirm that the uptrend is over and could give me some room to trim my losses before my full stop is hit.
Do you guys think I should exit earlier, though?
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.