Pick of the Day: USD/CAD – Close Open Trades…

Close Open Trades and Orders: 2007-06-19 14:45

With all trading sessions closed except for the US, I have decided to close all open positions and orders at the current market price of 1.0628. It’s a great start to the week and I hope everyone did well on this one!

1st half: +20 pips
2nd half: +57 pips
Total: +77 pips

Stop Adjustment: 2007-06-19 11:04

Today’s monthly Canadian CPI read came out as expected with core at 0.3% and headline at 0.4%. When looked at a year over year basis, inflation is slightly down to 2.1%, but still above the BOC’s target rates of 1% – 2% which supports the Loonie.

US housing data came in mixed with housing starts slightly down, while building permits slightly up. Traders didn’t take too kindly to this news as it essentially shows no change to a weak US housing market.

Our trade was triggered during the Euro trading session, and made a run down after this mornings reports hitting our first profit target. Half of our position was closed at 1.0665 and our stop on our remain position was adjusted to breakeven at our entry, 1.0685.

We will let this trade ride for now. Stay tuned for updates…

Trade Idea: 2007-06-19 00:48

PoD Chart

Welcome back to another fun filled trading week!! Or maybe not?? This week’s calendar is lacking as far as market moving data, with the exception of Canadian CPI and US Housing data as potential market movers later today. Has USD/CAD been in a correctional move? How will traders react to tomorrow’s data?

Well, fundamentals and rising oil prices still support a stronger Loonie, but tomorrow’s data will give us a hint on how many rate hikes we’ll see for the rest of the year from the Bank of Canada.

Of course, higher than expected inflation rates should push the Loonie higher and vice versa, but it seems the market has already priced in two rate hikes according to Canadian interest rate futures. A higher inflation read may not support the Loonie much further. The bigger move will come if inflation comes in lower than expected, and that’s how we’ll play it… weaker data, strong move….stronger data, weak move….

Long USD/CAD at 1.0740, stop at 1.0700, pt1 at 1.0760, pt2 at 1.0800

or

Short USD/CAD at 1.0685, stop at 1.0725, pt1 at 1.0665, pt2 1.0615

Please remember to never risk more than 1% of your account on any single trade. Adjust position sizes accordingly.

Stay tuned after the Canadian CPI data for possible adjustments ahead of tomorrow’s US housing data. Good luck!

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