09 Jan CAD JPY Added To Watchlist But Needs Patience
As with practically everything that moves, I’ve been watching this for a while. My last trade was a swing short back in June of 2011.
It does tend to be slow moving which makes it more cost effective to trade on futures contracts rather than daily contracts where the financing can add up almost as fast as the actual profit on the trade! The thing in particular that attracts me to this pair is MACD. It’s been trending down for considerable time yet no time frame has produced positive MACD divergences. Excluding crash scenarios try and find a chart where a long term low was printed with no positive MACD divergence on any time frame – not an easy feat!
MACD aside, here are a few charts I’m watching that don’t need really need detailed explanations, but do be aware of the 200MA’s on all time frames and consider those as upside risk.
The long term hourly chart shows a clear trend of lower price highs:
Zooming in on the hourly time frame we can quite easily define areas of likely resistance, or better put, areas of ideal low risk short entries:
Finally the daily chart shows price is climbing along a weak trend line. Depending on you’re strategy as a trader you may play safe with a trade like this and wait for a break down through this trend line before entering a position, or even waiting for a possible failed back test of the trend line from below, or, if you are more agressive you may look to enter short on any strength and just hold out for the inevitable….however long that may take to come. Don’t be too reliant on this triangle pattern as a break to the upside is quite possible, particularly with that 200 MA lurking just above.
Because this pair can consolidate for Weeks before making it’s move, it’s one of those where the trade can be completely missed if you take your eyes off it so it could be ideal to set price alerts through you’re chart package at some of the key levels I’ve detailed here and then sit back and wait!