Surf’s Up with USD/CAD’s Rising Channel! – Trade Closed

Trade Closed: 2012-07-13 06:02
Boo hoo! This isn’t exactly how I wanted to kick off the third quarter! I was unable to move my stop to break even because USD/CAD barely hit the 1.0250 minor psychological level, then the pair hit my stop at 1.0175 later on. Drats! Friday the 13th indeed!

USD/CAD Trade Closed

Stronger than expected U.S. economic data inspired a bit of risk appetite yesterday as the first-time jobless claims figure came in at 350K, which was less than the consensus at 376K. Because of that, the USD/CAD rally that I thought would reach my PT was cut short in an instant! After that, the pair dipped back below my entry point and headed further south to my stop at 1.0175. Boo!

I was a bit bummed at first, knowing that I could’ve adjusted my stop the moment USD/CAD climbed close to the 1.0250 handle, but I’m finding some comfort in the fact that my Q2 trading performance started on a similar note. But once I moved on from my NZD/USD loss back then, I went on to grab a lot of pips over the next few months. Does this mean I’ll be in for another set of wins afterwards? I sure hope so!

For now, here’s the damage on my account:

P/L in pips: -40 pips
P/L in %: -0.5%

Since this was just a day trade, I probably should’ve aimed for a smaller target and set a tighter stop to keep a decent reward-to-risk ratio. I’m having a bit of trouble adjusting to the choppy moves this summer so if you have any tips for me, you know where I’m at!

Trade Update: 2012-07-12 10:06
Yay, my buy stop order got triggered!

Risk aversion during the London session boosted USD/CAD higher enough to hit my order at 1.0215. Right now price is sitting around the 1.0238 handle, which is only a couple of pips away from the 1.0250 area where I finally move my stop loss to break even.

USD/CAD Trade Update

Do you think USD/CAD will reach the 1.0250 minor psychological level before it goes down? On the one hand, the disappointing initial claims data and rising bond spreads in the euro region are supporting the Greenback‘s strength. On the other hand, the pair is stalling at near the area right when a bearish divergence is popping up.

I’m sticking to my original plan of waiting for price to hit 1.0250, but I’ll keep close watch on the 1-hour chart in case I see more reversal signals. Maybe I can move my stop to break even then.

What do you think?

Trade Idea: 2012-07-12 02:42
Good morning, guys! Time for my first trade for the third quarter!

This week I’m looking at a potential rising channel play on USD/CAD’s 1-hour chart. If you’ve marked your weekly levels with me, you’ll know that the pair had just bounced from its week open level, which is near the bottom of the channel.

The setup is looking sweet for me as I’m also fundamentally bearish on the Loonie. The stimulus spree from the central banks that we saw last week inspired economic growth concerns for the euro zone, the U.S. and China, and weighed on the high-yielding currencies and oil prices.

Speaking of oil, my commodity-lovin’ friends also gave me a heads up that oil prices are suffering after Norway’s labor strike ended yesterday and China’s trade data showed less demand for black crack.

USD/CAD Channel

Since stochastic isn’t helping much, I decided to place a buy stop order at 1.0215. This is not only above the symmetrical triangle forming on the 1-hour chart, but is also above the previous week high (PWL).

I placed my stop loss 40 pips down at 1.0175. I figured the pair would’ve broken below the symmetrical triangle, rising channel on the 1-hour chart, yesterday’s low, today’s bottom daily ATR, AND the mid-channel support for the falling channel on the 4-hour chart. That’s a lot of broken support lines, don’t you think?

I’m planning to take profit at 1.0265 (the top of the channel) since this is only a day trade, but I’m moving my stop loss to break even once the pair hits 1.0250. Wanna trade this setup with me? Make sure you read the risk disclosure!

What do you think of my setup? Will risk aversion continue to dominate markets, or will we see dollar weakness over the next couple of days?

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Your two cents are always welcome!

Happy time

Other Popular Articles:

NZD/USD trade What is the STA strategy? Comdoll Trading Kit (July 9-13, 2012) Q2 2012 in Review

3 comments

  1. Russ

    Boy, it looks very indecisive regarding 1.0250 on 1H, 4H and Daily time frames. It feels like the dollar will push higher today but I’m no barometer.  I just seems like bulls and bears are just sitting and waiting for something to happen.

    Reply
  2. Russ

     Sorry it didn’t work out.  Bad news everywhere is creating a lot of turbulance in the markets but it was a sound well thought out setup.  Either way, congrats to sticking to the plan.

    Reply

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