Pick of the Day: USD/CAD – Close Open orders

Close open orders: 2007-05-03 15:50

Well, it’s almost the end of another trading today, and today we saw positive data out of the US. We saw surprises to the upside with Nonfarm Productivity at 1.7% versus the consensus of 1.0% and the ISM services index number higher at 56.0 versus the consensus of 53.2. Also, Unemployment claims came in better than expected at 305K. So, the dollar rallied across the board on all of the positve data, except against the Loonie.

The data barely made waves against USD/CAD, which goes to show how strong the market’s sentiment is on the Canadian currency. The Loonie is still trending against the majors and the run is expected to continue.

So, I still remain bearish on the pair, but ahead of tomorrow’s NFP numbers I will close out my open orders to avoid the extreme volatility that report usually generates.

Trade Idea: 2007-05-02 23:05

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The Loonie has been on a roll, but when is it going to stop?? I don’t know but the trend is strong so we’re gonna roll with it! The market has been focused on the positive US manufacturing data for the last couple of days and the dollar has rallied, but with the ADP report logging in weaker than expected numbers, traders are now thinking we may see a weaker Non-Farm Payrolls number this Friday. This plays nicely into a new short USD/CAD trade!

The pair has found support at 1.1062, so is the trend strong enough to break down below the support? If it does break, we could see the pair drop down to a low it hasn’t seen since last summer. I think potential future rate hikes still has not been fully factored in and that we won’t see strong support until we reach that low from back in June.

Short USD/CAD at 1.1035, stop at 1.1070, pt1 at 1.1015, pt2 at 1.0970

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

Good luck and good trading!