Revisiting a Few Old Ideas – and Sharing Some New Ones

On July 31, 2024 I advised my readers to buy euros against the Canadian dollar (EUR/CAD) as I was expecting the cross to rally slowly towards the 1.5900 level.  We hadn’t reached that level since July 2020, but I was quite confident we would get there.  We were trading around the 1.5000 level at the time.  Since my original forecast I have sent out a few reminders to my readers to be patient with the position as the cross tends to wobble along in an agonizing fashion, but I remained confident that it would eventually hit my target.  Well, the cross finally hit my target, touching 1.5960 this past week, before abruptly correcting back down to 1.5600.  

Hopefully, you hung in there and waited patiently for this cross to hit our target, as taking a profit on this position after so long was certainly gratifying.  We are starting to gently reposition, however, scaling back into a fresh long position in EUR/CAD as we suspect this move might have a lot farther to go.  It might correct lower, perhaps reaching 1.5400, or even 1.5200 at an extreme, so I am treading carefully.  Over time (a long time, unfortunately) we remain very confident that the cross has a lot of upside.  If things play out as expected, it might go all the way to 1.7500, but don’t expect any big moves in the near future.  I have a variety of reasons why this trade might develop into something much bigger, but first, let me touch on some other ideas.

Regarding dollar yen, one of my favorite currency pairs to trade, we finally hit my target of 140.00 yen per US dollar.  I recommended to my readers on October 25, 2024 that they establish a long yen position against the dollar to play for a move to 140.00.   At the time, dollar yen was trading at 153.20, and it has been a bumpy ride, but we finally reached my level.  As I wrote recently, we took profits on our position, but we are also starting to slowly rebuild our long yen bets.  I believe yen still has a lot of upside, but we need to be patient with this pair as well.  I think it might correct back towards the 146.50 – 147.50 level, but we will gently scale into a short dollar exposure along the way.  That should give us a good average entry for a long-term move to much lower levels.  

How far do I think we go?