It looks like that double top and neckline break on EUR/CAD is legit, pushing my position further into profit. Time to adjust ahead of some top tier forex events.
Original Trade Idea: Forex Trade Idea: EUR/CAD Double Top
Thanks to a mixture of weak European economic data, better-than-expected Canadian data, and a solid push higher in global risk sentiment recently, EUR/CAD managed to make a strong break of the neckline formed by the recent double top. After entering short at 1.4925 for 0.50% risk, the pair has dropped nearly 400 pips since my entry to give me a quick profit in just a few days.
Now, we’re approaching some potentially volatile events this week, most notably the monthly U.S. jobs data. And while this data set isn’t directly related to the euro or the Loonie, it does have a big influence on global risk sentiment. Good readings (which are currently expected) could lead to the argument for a March FOMC rate hike, which would likely take down global risk sentiment. Plus, we’ve got Canadian trade balance data at the end of the week with an expectation for a set of weaker numbers, so the odds are we could see the Loonie take a hit into the weekend.
So, to create a “risk-free” trade, I’ve decided to lock in a very small profit by rolling down my max stop down on my open position to 1.4775, locking in 150 pips or a 0.15% gain. I also closed my short orders at 1.5250 to reduce my risk.
Depending on price action going forward, I may look to maximize my gains with another short entry, likely if there is a weak pullback higher. My target is still 1.4100 for now, but I that may change depending on what we see from Canadian data this Friday. Stay tuned by following me on Twitter and Facebook!