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Friday, October 22, 2010

Currency Focus: Looking at the CAD/JPY

Hi Traders,

Better than expected retail sales have given the CAD a boost, but I am still favouring weakness in the pair overall.  Given that the pair is closing in on a resistance level and stoplosses could be kept tight, now could be a time to short.

It looks as though even if the pair breaks through, there is significant resistance at the 80.90/81.25 area where the 21 day SMA and the 55 day SMA loom.  More conservative traders may want to consider being patient and wait to see if the pair will come to them, but given that the stoploss can be kept tight, some may consider testing the waters out now on the short-term charts. 

For my trading plan with the pair, entry prices, stop losses and targets, click on the "My Trading Journal" link at the top of this page. 

Aaron Reid

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