Short USD/CAD – Trade Closed

Trade Closed: 2007-03-29 15:25

Hello :) sorry for the late update on this trade. Unfortunately, I caught the flu bug going around, but I seem to be getting over it now. It looks like the pair failed to follow through the downward spike from earlier this week and stay range bound for the last 2 days. The third portion of our trade was stopped out for additional +10 pips on a spike up during the morning Euro session yesterday. So, after all it is all said and done we managed to capture 30 pips from USD/CAD. Awesome! :)

1st position: -35 pips
2nd position: +55pips
3rd position: +10 pips
Total: +30 pips

Trade Update and Stop Adjustment: 2007-03-27 19:35

Hello! :) Just a quick update on our short play on USD/CAD. Our short position triggered at 1.1625 hit its profit target at 1.1570 for +55 pips. That just leaves us our position that we re-entered at 1.1600. We will adjust our stop on that short to 1.1590 to lock in +10 pips on that position. Our new target will be 1.1500. If the pair drops to that level we readjust our stop, so stay tuned!

1st position: -35 pips (closed)
2nd position: +55 pips (closed)
3rd position: +35 pips (open)

Trade Update: 2007-03-26 11:15

It looks like the portion of our short position that triggered at 1.1600 stopped out at a small -35 pips loss. The pair is heading back down south again, currently trading near 1.1600 once again. The rise in oil and commodities should continue to be bullish for CAD, while the weak housing data should be bearish USD. I will re-enter a short half the normal position size at 1.1600 with as stop at 1.1650, pt at 1.1525.

1st half position: -35 pips (stopped out)
2nd half position: +25 pips (open)
Re-entered half position at 1.1600

Trade Update: 2007-03-23 14:10

Greetings Everyone! :) It looks like one of our short orders was triggered in the USD rally this morning after the Existing Home Sales numbers came out better than expected – up almost 4%. I still favor the short trade on the pair, especially with oil still on the rise, so we will hold onto this position into the weekend. Stay tuned for more updates and have a great weekend!

Trade Idea: 2007-03-21 22:55

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Hello! Hello Everyone! We have see a lot of strong moves in the currency markets, especially after today’s FOMC interest rate statement, huh? Well, today we will take a look at the Canadian Dollar, which has gained significantly against the US Dollar in the last couple of trading sessions.

Before we go into today’s trade we’ll take a quick look at the commodities. As I’m sure some of you know, the “Loonie” has a strong positive correlation to Oil prices, and today we saw oil rise for a third day in a row as the markets see an increase in demand from US refiners. This should have a positive affect on CAD.

With the Fed leaving out commentary that suggests a possibility of an interest rate hike today, traders will continue to price in a possibility that the interest rate differential will narrow between the Canadian Dollar and the US Dollar. So, we should see USD/CAD drop further as traders have a short bias on this pair.

On the chart, we can see that the pair has moved over 200 pips in the last two trading days. Stochastics are in oversold territory, so we may see retracement on profit taking. This should be a great opportunity to short at a great price!

If the pair retraces, then

Short half normal position size of USD/CAD at 1.1600, stop at 1.1635, pt at 1.1550

Short half normal position size of USD/CAD at 1.1625, stop at 1.1670, pt at 1.1575

Please remember to never risk more that 1% of your account on any single trade, so please adjust your position sizes accordingly.

  • pipjake

    Its the 25th and markets have just reopened. I was wondering if I could enter a position on this pair at this time at 1.1600 or is it too late now that PT has already been hit. I wanted to know in case of a similar situation in the future. Thanks,

  • happypip

    Hiya pipjake :) If the pair drops back down to 1.1600 you can enter again, but I would set the stop wider than 35 pips on that order. I will probably enter short again at the level on my own account, depending on price action. Good luck :)

  • pipjake

    Its the 25th and markets have just reopened. I was wondering if I could enter a position on this pair at this time at 1.1600 or is it too late now that PT has already been hit. I wanted to know in case of a similar situation in the future. Thanks,

  • happypip

    Hiya pipjake :) If the pair drops back down to 1.1600 you can enter again, but I would set the stop wider than 35 pips on that order. I will probably enter short again at the level on my own account, depending on price action. Good luck :)

  • toptick07

    Hi happypip, I saw this trade in a different time frame and got short from 1620 area. Seems to be rebounding off the 1.1558 area. Looks to be bottoming on the hourly chart and bouncing off the .382 retrace of the august 30 low to the jan 30 peak on the daily. Took some profits during the day today, but not sure about holding out for a further breakdown to the 1.14?? levels. Your thoughts? ;-) Happy, Happy!

  • toptick07

    Hi happypip, I saw this trade in a different time frame and got short from 1620 area. Seems to be rebounding off the 1.1558 area. Looks to be bottoming on the hourly chart and bouncing off the .382 retrace of the august 30 low to the jan 30 peak on the daily. Took some profits during the day today, but not sure about holding out for a further breakdown to the 1.14?? levels. Your thoughts? ;-) Happy, Happy!

  • happypip

    Hey toptick07,

    On the daily chart, the pair seems to find resistance at 1.1560, right above the 200 SMA. Price action is telling me we may see this pair shoot back up to 1.1700 – 1.1750 area. Fundamentally, it is hard to say. With oil on the rise on demand and geopolitcal factors, and a strong Canadian economy, the Loonie looks to rise. The USD is hard to tell. A weaker economy, but concerns of inflation still make it hard to predict, which is why we’re seeing the pair trade sideways for now. In the short term, we may see more range bound trading, with a possible break to the upside as the pair looks oversold for now. I hope this helps :)

  • happypip

    Hey toptick07,

    On the daily chart, the pair seems to find resistance at 1.1560, right above the 200 SMA. Price action is telling me we may see this pair shoot back up to 1.1700 – 1.1750 area. Fundamentally, it is hard to say. With oil on the rise on demand and geopolitcal factors, and a strong Canadian economy, the Loonie looks to rise. The USD is hard to tell. A weaker economy, but concerns of inflation still make it hard to predict, which is why we’re seeing the pair trade sideways for now. In the short term, we may see more range bound trading, with a possible break to the upside as the pair looks oversold for now. I hope this helps :)