Forex Trade Update: Long-Term USD/CAD Uptrend

Hey comdoll buddies, I’m gonna need your help with this one. Do you think I should cut my losses with my swing forex position on USD/CAD? Or should I hold on?

If you’re wondering what I’m talking about, make sure you take a look at my initial forex trade idea right here.

As you can see from the pair’s daily chart below, price is already testing the long-term rising trend line support and might even be attempting to break lower. After all, the Loonie has been on a tear these days, thanks to hopes of an OPEC oil output freeze and lower expectations of a BOC rate cut, as Forex Gump explained.

USD/CAD Daily Forex Chart

USD/CAD Daily Forex Chart

Because of that, I’m having second thoughts about keeping this swing position open, worrying that the Canadian dollar might be in for more upside. Then again, data from the U.S. has mostly been upbeat lately and there’s still a strong chance for the Fed to hike rates before the end of this year, which might be enough to keep the Greenback supported.

My stop is still a few hundred pips away from the current price, which gives me room to cut losses if I think that a reversal from the uptrend is about to take place. Maybe the upcoming NFP release can allow me to exit on a quick bounce… or not. Help! Care to share your thoughts?


Happy time

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  • Jonathan

    Comdolls, I enjoy your posts. I think I would hold onto these positions. Technically, you could still get good support (from broken resistance) in the 1.3375 area. Stochastic is also showing potential oversold conditions and still with the 61.8/78.6 Fib retracements.
    Also, b/c you have two entries in this setup you should believe and trust in your system. I would rather hit my stop, then close and have my initial thoughts validated and miss pips. It could also retrace from the bearish trend back to your 1st entry point and you could close for a small pip profit. Tough decision, with oil and the Lonnie bullish moves recently.
    Just my 2 cents, Good luck!, Cheers

    • Hi Jonathan, thanks for sharing your thoughts and helping me frame my thoughts better. I’ve been feeling pretty confused about the techs and fundamentals of this one for the past few days!

      I tried to imagine how I might react to possible scenarios and I do agree that I’d rather see my stop get hit instead of jumping ship just before a rally takes place.

      For now it looks like oil is retreating again but with the BOC statement coming up, I might have to trim my position a bit to cut potential losses while still staying in the market to possibly benefit from any strong rallies.

      I really appreciate the constructive feedback. See you around!

  • Jonathan

    One thing to add, if price broke below 1.3375 area (support area) and below rising trend line, I would close both. Since original trade ideas are likely invalidated. Take care

  • Bundypips

    Hi Happypip
    Don’t give up!!! My own tail of woe on this trade set up was entering long at the previous resistance level of 1.4 and setting my stops below the “supposed” support level of 1.35 which just happened to be well outside the bollinger bands for the 1 day chart when i entered on 11/02/16. Needless to say price galloped past the 1.34 level without slowing and i got stopped out loosing a bunch of pips.
    I am with Jonathan on this one though. Ask yourself how you would feel if you manually closed your trade to have price reverse straight afterwards and shoot up past your profit target. Why did you set your stops where you set them in the first place? when is your trading plan invalidated? Now or when you hit your stops?
    In regards as to which way the USD/CAD will go next, everyone is waiting for the big crash in oil prices that the supply glut must surely bring about. But will that cause the loonie to reverse? from the 05/02/16 to the 11/02/16 us oil fell by 700 pips to trade at $26 a barrel and during the same period the USD/CAD just went sideways not up like everyone had thought it would. It’s a sticky pair right now that’s for sure.
    My own trading plan now is to sell the USD/CAD as my plan got invalidated at 1.34. I’ll let you know how that goes.

    • Thank you so much for the words of encouragement! I did have an entry order right around 1.3500 since it looked like near-term support at that time, and I didn’t want to miss a strong bounce.

      Now that I’ve asked myself those questions you mentioned, I feel more confident about keeping part of this trade open to allow me to book profits in case price does make a rally eventually.

      Looks like we’re getting more reports on an oversupply (API report) again and we’ve got the BOC statement coming up so I think I gotta make some adjustments but still maintain a long bias. Thanks again for sharing your thoughts, see you around!

  • morley

    hi happy
    i am just like you, but i am sticking with it. the glut is real the and the talk is cheap, russians talking it up every four days. as they all have to keep pumping and shale showing signs of survival at $40. Iran is keen to ramp it up. 1000 pv panels on the roof a day.roll out those electric cars!!! Oil is going to retest 26-28 and cad back to retest 140.
    having got it so very wrong so far, so dont listern to me. but techs do look so tempting.

    • You know what, I’m totally on the same boat as you are! I do see plenty of signs that the supply glut would get worse, but it just so happens that speculations of a production cap are driving crude oil and CAD price action for now.

      Thanks for sharing your thoughts, I really appreciate it. Glad to know I’m not alone!