After adjusting my position to maximize my potential gains and limit risk, CAD/JPY spiked higher before the end of last week and triggered my tight stop to close me out for a small gain. Here’s a quick review!
CAD/JPY Range Resistance?
Last week, my conviction went up that the bearish trend in CAD/JPY would continue due to the historic crash in oil prices and the global risk-off sentiment that came with the event. Oil is Canada’s largest export, so odds were higher than pressure would come to the Canadian dollar off of this event.
With that fundamental view and the fact that price broke below the rising ‘lows’ pattern, I decided to increase my position size a bit to maximize my potential gain, but I kept my stop tight at 76.70 enough to keep it a “risk-free” trade with a profit locked in.
Unfortunately, CAD/JPY spiked higher later in the week off of a drop in the yen due to a news report that the Bank of Japan was mulling unlimited bond buying at next meeting (which actually came true in today’s BOJ statement). This took CAD/JPY up to my adjusted stop at 76.70 pretty quickly to close out my position for a small gain:
Total: +53 pips avg. / 0.19% loss on 0.50% risk taken
Since then, oil did bounce back by the close of Friday, but it seems to be back to its bearish ways this week as the fear of storage running out is a problem that’s not going away any time soon. I’m still bearish on CAD, but I’ll have to look to play it against the other risk currencies as global risk sentiment has swung positive on the hopes of economies opening up around the world.
That’s it on CAD/JPY for now…Stay tuned for updates and as always, remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly. Create your own ideas and don’t simply follow what I do.
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