[B]My picks:[/B] Remain Short CADJPY
[B]Expertise:[/B] Combining Money Management with Fundamental and Technical Analysis
[B]Average Time Frame of Trades:[/B] 3 days - 1 week
It is nearly impossible to avoid speculating on risk trends considering their influence over the entire currency market. AUDNZD would be one of the few pairs that would ultimately neutralize this sweeping driver; but key economic indicators would ultimately force technical support and run my stop. Even a favorable move in the market can lead to a failed trade should volatility not be accounted for and a trade not be properly tuned.
Looking across the commodity bloc this week, the few pairs that have relatively little correlation to swings in sentiment recently (AUDNZD and AUDCAD) look as if they are nearing breakouts - regardless of direction. It is not worth trying to draw from these tight ranges as the risk is far greater than the absolute reward. Therefore, I venture out into the world of speculating on risk trends. The reversal in CADJPY over the past 48 hours has triggered my short setup from Wednesday at 88.50. Even if I had no previous exposure to this position, I would still consider it a strong setup. The top of a well-established rising trend channel has shown its influence over price action but thwarting a fourth attempt to overtake 89 in the past week. My stop is 89.75 and the first target equals risk at 87.25. The remainder of the position is set with an objective down at 85.50 on a deeper retracement into the channel.