The CAD/JPY is setting up nicely for a reversal.

The first chart is the 1 hour and it shows our green BaseLine:

The
second chart is the 15 minute chart and it shows our blue EntryLine.
If the pair closes above this line, we could have a good buy trade and
target the green BaseLine.

Now,
the pair has moved so far so fast that we can draw a red SteepLine, and
maybe even get in earlier on a close above the red trendline.  The goal
would be for the pair to carry us up to the blue EntryLine and we’d
have a huge jump on the reversal.  Be careful, however: with an earlier
entry and a tighter stop, we get the chance that we could stop out of
the trade more easily.

Here’s the SteepLine chart (also the 15 minute):

CAD/JPY.  Top rolled down.  Tunes playing.  Hair slicked back and those Ray-Bans on.

It’s classic support and resistance time.  If the pair closes above the blue trendline, I’d be gearing up for a buy trade — I might wait to take it, as in wait until it actually closes above and then jumps back down to touch the line (a Winnipeg move).  Profit target would be the 119.67 area, a recent high.  Stop loss below that hammer-looking candle on the far right — underneath 118.00.

Good morning, boys and girls!  Happy to have you along for the ride today.  We talked yesterday about the fact that the CAD/JPY was, far too soon, already back at the bottom of the channel.  And that it’s a possibility that we could sell it if it closed below the bottom of the channel.  Which it did.  Which did create a sell trade.  Which is profitable right now.

The red lines on the outside of the channel are my Winnipeg Lines, and are simply fib extensions of the outside of the channel (23%, 38%, 62%).  These are the profit targets on the breakouts.

Trading with channels is one of my favorite things, along with VW buses, great pizza, and the HMS Somerset.  In this case, the CAD/JPY didn’t disappoint us.  The pair hit the bottom of the channel and then popped up to hit the first fibble, which is always the first choice as profit target.

What I like about buying at the bottom of a rising channel is that our profit target (the fibble) is moving away from us (letting our profits run), and our stop loss (below the bottom of the channel) is getting closer as time goes on (meaning we are cutting our losses fast at any time).

Anyway, here is the chart:

Hey!  There is a channel on the 4 hour CAD/JPY.  We might come up with some trade ideas from this, so I am posting about it right now in order to get ready.