CAD JPY Analysis Ahead of Short Entry For W/C 5th March 2012

CAD JPY Analysis Ahead of Short Entry For W/C 5th March 2012

Almost certainly a little premature with this one as price continues to make new highs whilst COT report shows traders are now net short the Japanese Yen for the first time in recent history.

As you may know from previous discussions surrounding CAD:JPY, I’ve never been interested in the long side of this pair, partly due to the fact that none of my systems have triggered buy signals since the trend reversed a couple of Month’s back and partly because the main long term trend is still effectively down.

What I do find interesting is pattern repetition when comparing the current move against previous very similar moves. This daily chart explains everything:

Moving to the Weekly chart and it would be fair to suggest that the current move is likely to stay within the confines of this descending triangle, offering a fairly safe short entry were the traingle limits to be achieved. Note that it would be quite possible to see a candle wick protruding beyond the triangle limits to test the green 200 MA.

Going forward my strategy on this pair will be to hunt down bearish signals on smaller time frames ahead of entering a swing short targeting the upwards sloping trend line. I’m probably too early with this call and it’s not likely to offer a trade-able entry as soon as this Week, but it’s one I’ll continue to watch with interest as it’s very likely a good swing short entry will become available over the course of the next Month.