Short USD/CAD: Avoided a Loss!

Avoided a loss: 12-01-04 | 07:31

Whew! I managed to avoid a heartbreak by keeping close tabs on risk sentiment and deciding to stay on the sidelines instead.

As I hinted on my Facebook page, I had a nasty feeling that risk was going to be off for the rest of the week last week when euro zone debt concerns started making headlines again.

USD/CAD Trade not taken

At that time, the euro zone received a trifecta of bad data as their CPI came in weak, German bond auctions disappointed, and Germany’s retail sales faltered. Of course, this took its toll on the higher-yielding currencies such as the Loonie, as traders hesitated to park their money in riskier assets. With that, USD/CAD flew past 1.0150 and topped close to 1.0300 last week. Yipes!

Good thing that I mentioned in my trade plan that I was going to watch both candlesticks and risk sentiment carefully before placing my entry orders. And I thank my lucky stars and my new year’s trading resolutions I did! Patience and prudence really do pay off, huh?

My first trade idea of the year may not have given me profits, but at least it didn’t put a dent on my account. I still have a chance to start the year strong this week as I scour the charts for a new comdoll trade idea.

If you wanna help me out, you know you can always get in touch with me through any of these accounts:

@Happy_pip Twitter
Playing with Comdolls Facebook page
Happy Pip Comdoll Corners

Hope you’re having a good trading week!

Happy time

Trade Idea: 12-01-04 07:31

Happy New Year, my friends! I hope you got enough rest over the holidays because it’s time to start bagging pips in 2012! For my first trade idea this year, I’m looking to short USD/CAD.

As Big Pippin pointed out in his Chart Art today, USD/CAD looks ready to retrace to the 1.0150 handle with a bearish divergence and overbought Stochastic signal in place.

Not only that, the minor psychological handle is also near the 50% and 61.8% Fib levels! It also helps that 1.0150 was a support level last December 28 while we were all packing in all the holiday leftovers.

USD/CAD Retracement Play

On the fundamental side of the trade, I’m looking for a continuation of the comdoll rally that we saw yesterday. I know, I know, I’m bummed I missed it too!

Good thing Canada isn’t scheduled to release any economic reports today, so I’ll only keep close tabs on events in the euro zone and the U.S. If the euro zone posts good PMI and CPI numbers and we also see strong factory orders reports from the U.S., then the comdolls might extend their gains. If not, I’ll probably adjust my trade my entry levels.

Right now I’m looking to short at 1.0150 with my stop above the 61.8% Fib, but I’ll also be careful of any game changers that might come up within the next few hours.

How about you? Are you buying the comdolls too? As usual, don’t hesitate to talk to me over the links or comment boxes below! It would be great to talk to forex traders again after such a long holiday, you know.

@Happy_pip Twitter
Playing with Comdolls Facebook page
Happy Pip Comdoll Corners

Here’s to more pips in 2012!

Happy time

  • Tansen

    NFP…. don’t touch it.

    • happypip

      Ha! Good thinking! Thanks for the tip

  • Thurstang

    Hi Happy Ive been following you for a while and im a big fan just one question, why are you expecting a risk rally ?

    • happypip

      Aww thanks! I was sort of banking on the rally in oil prices to boost the Canadian dollar, but I guess risk aversion was just too strong that week. 

  • FlyBoy@400FL

    The issue I see with the negative divergence is we are coming off of a period of slow trading so IMO I would not trust it.
    If USDCAD daily candle closes below 1.01 either today or tomorrow, we will see a downward move.  50 day Bands are being tested as well and I see weakness.  I’d be in this trade below 1.01.
    USDCAD’s base has been supported by the 150 day MA and it’s testing that now. 1.00 will be a huge hurtle and a great place for a take profit.
    I hope this move happens, my vacation money will go farther!
    Happy New year!

    • happypip

      Whoops, looks like 1.0100 held as strong support. Good call in watching out for that level though!

  • Max

    going long in this 🙂 trading after the res  of 50% breaks.

    • happypip

      Good call, Max! I hope you already took profits 🙂

  • Astock460

    there is still no short entry signal

    • happypip

      Yeah, that’s true. I was watching the candlesticks closely but I didn’t get a bearish signal, so I just sat on the sidelines. Did you take this setup?

  • Galnaami

    it is on bull direction right now…….your chart is not updated

    • happypip

      Oops, sorry about that. But you’re right, USD/CAD rallied like crazy! I was able to copy the charts early in the week but opted out of the trade so I wasn’t able to post a new one until today.