Trade Review: USD/CAD Aiming for Channel Resistance?

Looks like USD/CAD had its sights set on breaking the channel support instead of aiming for the resistance. Here’s what happened to my trade idea.

Long USD/CAD

I tried to catch a move past the mid-channel area of interest with a buy stop order at 1.3185 then planned on setting another buy order at the bottom of the channel around 1.3050. Thank goodness I bailed on this second position, though, as USD/CAD eventually tumbled to my stop below 1.3000 anyway.

USD/CAD 1-hour Forex Chart

USD/CAD 1-hour Forex Chart

As Pip Diddy mentioned in his U.S. session recap, energy ministers from OPEC nations had a few upbeat remarks on the crude oil market, trying to reassure everyone that prices are stabilizing and that the market is in the process of rebalancing itself. This gave the commodity a huge boost, in addition to positive expectations for the informal September OPEC meeting.

On the flip side, the Greenback seems to be having trouble holding on to its post-NFP lead, as traders are shrugging off the strong medium-tier U.S. reports these days. By the looks of it, market participants have set the bar much higher and are waiting for more impressive reports before speculating about a Fed rate hike next month.

Because of these factors which materialized earlier in the week, I decided against adding to my long USD/CAD position and increasing my risk on this setup. I probably should’ve cut my losses on my initial position as well, but I was still hoping that the rising channel support would hold. Here’s what I ended up with instead:

P/L: -210 pips / -0.25%

Bah! I’ve been having a tough month so far since I simply seem to be limiting my losses instead of chalking up some gains. I’d really appreciate your feedback or any comdoll trade ideas you’d like to share to help me out!

Cheers,

Happy time

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  • gravitypips

    On the daily charts the price action since Jan 20 16 has been a sustained downward trend, then on May 3 16 it entered in to what looks to me to be a rising wedge. This pattern could break out on either side if I read the school entry on chart patterns correctly? It needs to be looked at on a narrower time frame to appear as a rising channel.
    Since I’ve never looked at fx until last week don’t take me too seriously. Just askin’

    • Yep, I see that wedge you’re referring to!