Forex

I am beginning to buy in more and more on the . It has already shown strong signs of recovery and this week, when it declares unemployment numbers, I feel that the numbers will make the belief in the . The commodity prices are still going up, and in fact, even the agricultural commodity prices are going up.

The question comes up as to what should be the FOREX trade. What should I trade the Canadian dollar against. Typically I like to do FOREX trades between a strong and weak currency. That means I like to buy a strong currency and sell the weak one. The US dollar is definitely weak. But I am already playing that using my XDC call options which is a bet that the Canadian dollar will go up against the US dollar.

The other weak currency at this time is the Japanese Yen (JPY). With risk-taking back in the investors mind, the JPY will typically suffer. Plus, the commodity prices going up hurts the JPY.

So, I ended up going long the CAD/JPY FOREX pair (bought the Canadian dollar and sold the Japanese Yen against it). My trade price is 83.063 and my target is at around 85.2 which will give me around a 200 pip gain. This is a medium term play which I expect to pan out in a few days to a few weeks.