Going Nuts for the Loonie – Close Open Orders

Trade Idea: 2010-06-15 23:11

PoD Chart

Talk about being aggressive! Despite my earlier-than-usual sell order, I was still unable to get triggered. Risk appetite was turned out to be too strong, which traders sufficient reason to sell the USDCAD without letting it retrace.

Although the pair has yet to make a new swing low, I have decided to close my open orders and look for opportunities elsewhere. The markets are pretty choppy right now, and who knows what might happen as we hit the middle of the week! A potential mid week reversal? Stay tuned!

Trade Idea: 2010-06-14 23:11

PoD Chart

Looking at Canada’s economic schedule, I noticed that there are a couple of low-key reports due today. Labor productivity and manufacturing sales numbers are due 12:30 pm GMT and both could post slight improvements. Labor productivity is expected to post a 1.4% quarterly increase for the first quarter while manufacturing sales are hoping to see a 0.3% uptick for April.

For the week, it seems that Canada is free from any top-tier releases. Only the wholesale sales report is due mid-week while Bank of Canada Governor Mark Carney is set to give a couple of speeches, one on Wednesday and another on Friday. He could highlight the strength of the Canadian economy and possibly hint at another rate hike soon. Oh boy, this could really make the Loonie bulls charge!

Stateside, we will see the release of the Empire State manufacturing index and TIC long-term purchases report today. Purchases of US securities are expected to dwindle in April, with the net purchases narrowing from 140.5 billion USD to 77.3 billion USD. With investors slowly letting go of their US securities, demand for the USD could also be driven lower.

Overall, it seems that Canada is in a much better economic standing compared to the US., which could keep the USDCAD downtrend intact…

Looking at the 4-hour chart, we can see that the pair has been forming both lower highs and lower lows. This means that the pair could be trending lower now.

I put on the Fibonacci tool once again to help me spot a good entry. With the markets still being pretty choppy, I’m once again going to scale into this trade. I’ve set my orders at 1.0400 and 1.0450, which coincide with the 38.2% and 50.0% Fibonacci levels. With stochastics still showing upward momentum, I think we could see the pair rise up a little bit and hopefully hit my entry points.

I’m only going to stick with one take profit point this time, as I’m not so sure how far or quickly this pair can drop. I’ll be aiming just above the recent low, setting my take profit at 1.0250. My stop will be at 1.0550, which would put it above the falling trend line and the 61.8% Fib. If price hits this level, it would invalidate my trade idea.

Here’s my recipe for success:

Short at 1.0400 and 1.0450, stop loss at 1.0550, take profit at 1.0250.

By the way, don’t forget to follow me on MeetPips.com!

4 comments

  1. wolfpup77

    I am predicting that risk appetite will last for at least one more day, if not longer, and all three com-dolls will be affected; therefore I am shorting Loonie ( @ 1.0262) and longing Aussie ( @ .8645) and Kiwi ( @ .6977) simultaneously. I’m starting to get a feel that fundamentals and sentiment is moving the markets, and technicals are taking a backseat! I’m pretty sure that Loonie will drop down to parity once again very soon, and it looks to me that the reverse head-and-shoulders patterns on the daily charts for Kiwi and Aussie have broken up and there will definitely be upward momentum for both of those “Down Under” currencies, according to Big Pippin’. Stay tuned on my results!

    Reply
  2. wolfpup77

    I am predicting that risk appetite will last for at least one more day, if not longer, and all three com-dolls will be affected; therefore I am shorting Loonie ( @ 1.0262) and longing Aussie ( @ .8645) and Kiwi ( @ .6977) simultaneously. I’m starting to get a feel that fundamentals and sentiment is moving the markets, and technicals are taking a backseat! I’m pretty sure that Loonie will drop down to parity once again very soon, and it looks to me that the reverse head-and-shoulders patterns on the daily charts for Kiwi and Aussie have broken up and there will definitely be upward momentum for both of those “Down Under” currencies, according to Big Pippin’. Stay tuned on my results!

    Reply
  3. pipsprof.

    Happypip, usdcad has formed a potential inverted heads and shoulder on the daily and weekly charts,so there is a bullish call from here now,watch it,its headed up at least 1.10000

    Reply
  4. pipsprof.

    Happypip, usdcad has formed a potential inverted heads and shoulder on the daily and weekly charts,so there is a bullish call from here now,watch it,its headed up at least 1.10000

    Reply

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