Close Open Orders: 2007-05-02 08:40

We saw some volatility last night as the pair dropped close to 1.1100 after the pick was posted. As expected, the pair rallied during the morning Euro trading session, but met resistance at 1.1140 before sharply moving down once again to 1.1100.

The ADP Non-Farm Employment data was just released at 64K, way below expectations. This has pushed the dollar down as the traders now anticipate weaker US Jobs data. It looks like our entry at 1.1200 will be out of reach for the day, so we will close all open orders.

Trade Idea: 2007-05-02 00:02

We saw USD rally today on the back of stronger than expected ISM Manufacturing numbers, but is that one report enough to change the bearish dollar sentiment in the market? Definitely not, but we are seeing the dollar rally, which may continue throughout the Euro session as traders come back from their holiday.

In the medium term, I am still bullish on CAD. Canada's economy is still strong with nothing but growth appearantly ahead. Now, Bank of Canada Gov. Dodge says that the loonie was trading "higher than assumed." This statement, plus the positive surprise in ISM, has lead to a pullback in the downtrend of USD/CAD and may continue as European traders come back from the holiday.

This scenario would be the perfect setup to jump into the rise in the Canadian Dollar at a great price. Here's our short idea:

Short USD/CAD at 1.1200, stop at 1.1230, pt1 at 1.1175, pt2 at 1.1150

Please remember to never risk more that 1% of your account on any single trade, so please adjust your position sizes accordingly.

Please stay tuned to this page for updates and trade adjustments. Good luck and good trading!