BK CAD/JPY Big Trade Update – Stopped Out

BK CAD/JPY Big Trade Update -- Stopped Out

BK Big Trade Alert Sell CAD/JPY

The Trade:

CAD/JPY

Place Order to SELL CAD/JPY at 93.75

Stop at 95.65

Risk on our BIG TRADES is large, so make sure your position is small.

We will manage the take profit dynamically and send out alerts on when to take profit and/or move your stop.

The recent decline in oil prices has taken a big toll on the Canadian economy, so much that the Bank of Canada chose to surprise the market with a 25bp rate cut last month. One of the main reasons why the easing was unexpected is because economic data had not really taken a turn for the worse. Data is always released with a lag and we are only now beginning to see what should become a series of weaker reports. This morning, Canada reported the weakest manufacturing activity index since May 2009. Over the next few days, we will continue to receive more economic reports for the month of December and January, a period when oil prices dropped as much as 35%. We expect these reports to surprise to the downside, creating more downward pressure on the Canadian dollar.

The recent rally in CAD was driven by a bounce in oil prices but a massive crude oil inventory build up sent prices back below $50 a barrel. This was the fourth consecutive week of inventory build and this excess availability of inventory could limit the recovery in oil. Without a bounce in oil, the Canadian dollar should resume its slide.

We have opted to sell CAD versus the JPY because of a potential miss in non-farm payrolls that could lead to a rally in the Japanese Yen. The employment component of non-manufacturing ISM dropped to its lowest level in 11 months.

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CAD/JPY

Place Order to SELL CAD/JPY at 93.75

Stop at 95.65

Risk on our BIG TRADES is large, so make sure your position is small.

We will manage the take profit dynamically and send out alerts on when to take profit and/or move your stop.
Swing

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