Two weeks we entered a long trade on the CADJPY with one unit at 78.60. We then proceeded to add on a second unit with a break of the Weekly KS at 79.70. Giving us an average price of 79.15. Short termers took some off at 80.52.
We have since traded back into our “Buy zone” and added a 3rd unit to the trade at 79.10. We are currently waiting for the CADJPY to trade back above the TS(Red Line) 79.77 to be fully bullish again. At this point we are looking for the Daily KS(green line) at 78.50 to hold.
The upward trending light blue line is still intact. If we were to break 78.50 for an extended period of time(2 hours) we have have to stop out and reevaluate our trade. We have mentioned with the deteriorating economy in Japan and a new consumption tax we believe Japan is in for a new round of easing. We believe our obstacles would be some sort of backstep in Europe. Also if in Friday Bernanke signals a big round of QE3 there is also potential to be stopped out.
Otherwise we sit tight and wait.
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