With big event risk coming up I decided to lock in profits on my AUD/CAD short position. Here’s a quick trade review and follow up thoughts after the BOC decision.
Original Forex Trade Idea: New Idea on AUD/CAD
There’s not much to this adjustment other than I wanted to lock in profits ahead of the Bank of Canada monetary policy decision. While data has been good for Canada lately and the BOC hasn’t raised rates since 2010, recent reactions to BOC decisions have been initially bearish. I thought it might be an opportunity to lock in profits and potentially jump back in at a higher price, so I closed my short position at .9598.
Total: +102 pips/ +0.60% gain
The Bank of Canada decided to hold rates at 1.00% and in their statement, they noted that the rise in inflation was more than expected and that the strength in the United States has benefited Canadian exports. They did cite weakening oil prices as a potential weight on the export economy, but overall, it looks like forex traders still have a net bullish sentiment on the Canadian dollar as the Loonie is making new session highs against many of the majors.
For now, I’ll sit back and let the market price in the news from the BOC before potentially hopping back into AUD/CAD, as well as scan the markets for better opportunities to play the continued bullish sentiment on the Canadian dollar. Stay tuned by following me on Twitter and Facebook!