Going Looney for the Loonie – Close Open Orders

Close Open Orders: 05-03 01:05

Even though the USDCAD rose sharply on Friday because of some poor economic data from Canada, I’ve decided to close my trade. New developments over the weekend have made me change my outlook on the pair.

Apparently, news has just broke out that China will be raising its bank reserve requirements, which has caused the dollar and yen to rally early in the Asian session. This was the third tightening measure, and I suspect even more will come.

Trade Idea: 2010-04-28 23:55

PoD Chart

I popped open the USDCAD daily chart and noticed that there’s support turned resistance near the psychological 1.0200 level. This is almost in line with the pair’s previous week high around 1.0215 so I’ll be setting my short order at that area. I placed my first profit target at 1.0070 since that level seemed to serve as support in the past and I put my next profit target near the pair’s recent lows. I’ve set a wide stop loss of 150 pips, so if price rises all the way to 1.0350, I’ll be closing my position.

As I’ve said time and time again, I think the prospect of a rate hike by the Bank of Canada will continue to be on everyone’s minds as we near the mid point of 2010. Remember, inflation is starting to pick up in Canada, giving more reason for the BOC to start thinking of raising interest rates.

Furthermore, the BOC has been giving rather hawkish comments, which has sparked speculation that the central bank is gonna raise rates before June.The Fed, on the other hand, maintained their stance on keeping rates low for an “extended period.”

In my opinion, the speculation of an interest rate hike from the BOC, together with the relatively better economic standing of Canada, will continue to prop up the Loonie in the weeks to come. Hmmm, short USD/CAD, anyone?

Again, this is what I’m going to do:

Short USDCAD at 1.0200, stop loss at 1.0350, pt1 at 1.0070, pt2 at 0.9950.

Considering how tight trading has been with the USDCAD now that it’s hit parity, I may be holding on to this trade for quite some time. In the mean time, I’m going to go back to playing Bejeweled Blitz! It’s so addicting! I’m trying to beat my personal high score of 345,234!

Thanks for reading my blog! Be sure to hit me up at MeetPips.com!

  • azri937

    seems like you missed the trade. hard luck dear..

  • azri937

    seems like you missed the trade. hard luck dear..

  • happypip

    @ azri937 – Yeah, I decided to just close my trade. I don’t feel bad at all though – there’s always tomorrow! :)

  • happypip

    @ azri937 – Yeah, I decided to just close my trade. I don’t feel bad at all though – there’s always tomorrow! :)