Today I’m going to show you why the Japanese yen is starting to get very interesting, and how it could translate to some incredible opportunities.
I’ll share how I’m looking to trade the CADJPY, including key levels and targets for next week.
Watch the video below and scroll down for the annotated charts and analysis.
The Japanese yen is starting to get interesting after weeks of consolidation.
So far this week, we’ve seen the JPY Index consolidate above the 6,820 range support, and even break the level with Tuesday’s close.
However, today’s price action could offer a fakeout or deviation opportunity for those trading the yen.
The fakeout is one of my favorite setups to trade due to their high success rate.
That’s especially true when it occurs on a higher time frame like the daily chart in the video above.
With that said, there are several hours left in today’s session, so where the JPY Index closes the day relative to 6,820 will be key.
If it closes above, we have a confirmed fakeout that could see the yen strengthen over the coming days and weeks.
And if it closes below 6,820 today, the level remains intact as resistance.
Remember, too, that we have a BoJ rate decision and statement within the next 24 hours.
So it may be best to hold off on any yen exposure until after the upcoming volatility.
The CADJPY is one yen cross to keep an eye on if we do see the JPY Index confirm a fakeout this week.
The pair is trading at the top of a year-long range high at 110.30, and today’s session is at risk of closing back below the 109.20 region.
However, I think the more convincing opportunity for any CADJPY shorts will materialize on a sustained break below 108.50 next week.
If the CADJPY gets below that region, I think a move toward some recent lows like 106.60 and 105.00 are in order.
Alternatively, a sustained break above 110.30 following this week’s BoJ decision would negate the bearish idea.
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