These setups are designed with a focus on USD volatility around Donald Trump’s Joint Address to the Union, scheduled for February 28th at 9PM Eastern Time.
Synthetic Long CAD/JPY
The below setup takes on net exposure for long CAD/JPY. I am not using CAD/JPY to make this play as I want to instead focus on USD-volatility; but I’m going to incorporate themes as we approach tonight’s widely-awaited speech from President, Donald Trump.
Short USD/CAD
This pair just recently put in another bounce off of support in the 1.3000 region just two weeks ago, and has caught a fairly aggressive bid over the last 24 hours to rally up very near a key resistance level at 1.3330.
Stops can be set outside of the prior-top side swing at 1.3410 to take on approximately 121 pips of risk. Targets can be set to 1.3164 and then 1.3030 for profit objectives of 125 and then 260 pips of possible upside, respectively.
Chart prepared by James Stanley
Long USD/JPY
I’ve been trying to catch another entry in USD/JPY for a while now, and we’ve spent quite a bit of time in a key support zone; which has me growing more dubious of the pair’s top-side potential in the near-term. Nonetheless, sitting ahead of a key driver like tonight’s speech, the setup is there and this helps to eliminate some short-USD exposure from the above USD/CAD short. Stops can be adjusted to 110.68 to take on approximately 160 pips of risk. Targets can be set to 114.00, 115.00 and 116.25 for approximate profit objectives of 180, 280 and 405 pips, respectively.
Chart prepared by James Stanley
--- Written by James Stanley, Analyst for DailyFX.com
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