Long CAD/JPY as Interest Rate Differential Begins to Bite: Top Trade Q1 2022

"Long CAD/JPY...........Top Trade Q1 2022...." Really?

Yes, the Week chart does show PA has arrived again to a VERY significant and pivotal area. However, before buying into bias cleverly caged in "news", we might be taken aback by something that happened on this last move up.

On the Day chart below we can see during this last move up of about two weeks duration, suddenly there was high activity in the 89.200 area even though activity was dropping on the way up to this price area. Was this SM buying, or SM selling? Well, price continued to climb after those orders were filled, and again we see price rose on weak activity. Now, if SM sold down there, they made a HUGE mistake. This is not likely. It is more likely SM bought down there and gave the MMs orders to "Sell high!" someplace higher up. If this is what happened, we know the MMs will, at some point, do exactly that.......HTMRW.

Hope you are getting the picture now. In order for MMs to fill SM "sell to close longs" orders they will need liquidity. It only comes from buyers! And, sadly, the traditional providers of liquidity, so that MMs can open or close SM orders, comes from the market sheep that "news with planted bias" helps to herd off the cliff......HTMRW.

We cannot ever know how the MMs will move price next, but there is reason enough here to be very cautious.....