Time to Buy the Loonie? – Trade Closed

Trade Closed: 2010-12-23 9:42

CAD/JPY 4-hour Chart

Boo hoo! Just when I thought this Loonie trade could reel me in some nice pips before the end of the year, Canada’s GDP comes in worse than expected. Their monthly GDP report printed a mere 0.2% uptick for October instead of the projected 0.3% rise. It ain’t way below consensus, which was probably why CAD/JPY had a minimal reaction to the report, but I was expecting a really strong figure after their upbeat retail sales reports a few days ago.

Since I didn’t get the bounce I was hoping for, I decided to close my trade early at 82.05. Besides, it looks like the rising channel I drew on the 4-hour chart broke already and it’s time to cut down losses.

Here’s the result:
P/L: -45 pips / -0.5%

I guess that’s the way my Christmas cookie crumbles. I wanted to end the year with a bang, but it looks like I’ll have to wait ’til next year to bag more profits. For now, it’s time to take a break from the markets and spend time with my family and friends during the holidays. Have a merry Christmas everyone!

Trade Update: 2010-12-23

My trade got triggered when the pair sold-off at the wake of November’s CPI report that came in worse-than-expected. According to Pip Diddy, the headline inflation figure came in at 0.1%, short 0.2% of what the market was eyeing.

On the bright side, the retail sales report overshot its 0.5% forecast by showing a 0.8% increase in consumer spending. I’m thinking that if October’s GDP report prints a figure higher than the 0.3% consensus, the market will done being such a Grinch to the Loonie and it will start paying attention to Canada’s positive reports.

I’m just keeping my fingers crossed that the GDP report, which is due tomorrow, won’t upset the market. That way, CAD/JPY will continue on its uptrend and reel me in some sweet pips!

Trade Idea: 2010-12-17 2:12

Rising channel on CAD/JPY 4-hour Chart

It’s too bad Cyclopip missed his CAD/JPY trade last week because, as he mentioned, the price would’ve hit his first PT (and beyond!) if his entry got triggered. The economic calendar for next week shows that there are a bunch of Canadian releases to watch out for and those could serve as catalysts for the Loonie to rise again. Let’s take a look at those economic reports, shall we?

First, there’s the Canadian CPI set for release on Tuesday 12:00 pm GMT. Inflation is expected to pick up by another 0.4% in November while core CPI could post a 0.3% uptick. Even though these are enough to show that Canadian inflation is rising at a healthy pace, stronger than expected figures could be much more bullish for the Loonie because it could serve as grounds for the BOC to hike rates soon!

Next, Canada will release its retail sales reports also on Tuesday. Although retail sales are projected to post a slightly smaller increase in October (0.5% consensus vs. 0.6% prior), the core version of the report could come in twice as much as the previously seen figure. This could serve as a nice preview for the monthly GDP release on Thursday. If retail sales come in better than expected, the October GDP could follow suit and push the Loonie higher.

From a technical perspective, I also found a setup that’s sweeter than rum cake! The pair has been channeling upwards in the 4-hour chart, so I thought that I could catch some pips with the bounce! I plan on entering near the bottom of the channel at 82.50 since Stochastic hasn’t reached the oversold zone just yet.

I’m also hoping that the bulls are still pip-hungry enough to hold the channel all the way up to 84.00, with a possible break all the way to 85.00. It’s the Christmas season after all, right? Lastly, I plan on calling it quits at 81.50, which is just below the channel and the support at 81.75.

I hope my second to the last trade of the year works out better than my Kiwi trade! Let’s bring those pips home!

Here’s my Christmas recipe for pips:

Long CAD/JPY at 82.50, stop loss at 81.50, pt1 at 84.00, pt2 at 85.00.

Wish me luck and hit me up on MeetPips.com!

  • ForexLobo

    HappyPip: Merry Christmas and Happy New Year, I wish than 2011 be a year full of Pips for You. Best Regards.

    P.D. In base at the analysis in the 4H chart of CAD/JPY, i think than your entry level in this trade (82.50) is a new resistance level in this pair.

  • ForexLobo

    HappyPip: Merry Christmas and Happy New Year, I wish than 2011 be a year full of Pips for You. Best Regards.

    P.D. In base at the analysis in the 4H chart of CAD/JPY, i think than your entry level in this trade (82.50) is a new resistance level in this pair.