USD/CAD: Another Range Play – Locked in Profits!

Trade Closed: 12-05-14 9:03
I promised to stick to my trade plan, I closed my trade before the weekend. Thank goodness the Canadian jobs data came in strong and gave me a chance to end in the green!

USD/CAD trade closed

Their employment change report showed that a total of 58.2K jobs were added in April, higher than the consensus of 10.1K. Although their jobless rate ticked a bit higher from 7.2% to 7.3%, the better than expected employment change figure is a testament that Canada is still one of the more stable economies out there!

Even though the 1.0050 resistance appears to be holding for now, I think I’m better off looking for another trade idea this week as USD/CAD has yet to make a convincing break below parity. It doesn’t help that China cut its RRR over the weekend, which could give risk appetite a difficult time gaining traction.

I was lucky enough to be able to close this trade at a decent price (.9985) right after the Canadian jobs release, which enabled me to end up with an average of 30 pips or a 0.3% gain on my trading account.

Of course I’ll still be keeping a close eye on this setup throughout the week in case I could get a chance to jump in again. Let me know if you have other comdoll setups in mind, too!

Trade Update: 12-05-10 3:05

Yesterday I entered my first position at market (1.0005) when I spotted a bearish divergence near parity. In case the pair blasts above parity (and it eventually did), I also placed an order at 1.0030 just below the top of the channel at the 1.0050 area.

Thanks to risk aversion that hit markets for the third day in a row yesterday, USD/CAD ended up hitting not only my order at 1.0030, but it also went above 1.0050! Since my stop loss is at 1.0070, it was hard to stick to my plan and not close the trade early.

USD/CAD trade update

Good thing I didn’t close my positions! The top of the range held after all with the pair now back to testing the parity level again. Now I’m thinking if I should wait for the pair to hit any one of my profit or stop loss levels or if I should make adjustments.

Today not only will Canada and the U.S. both release their trade balance data at 12:30 pm GMT, but Big Ben is also scheduled to make a speech at 1:30 pm GMT. Oh, and have I mentioned that Canada will also churn out its employment data tomorrow? Talk about playing wildcards!

Got any tips on how I can come out with a win on this trade? Right now I’m planning to wait it out until the big Canadian and U.S. reports are released, but I’m open to your suggestions!

Trade Idea: 2012-05-09 9:02

As one of my comdoll buddies pointed out, this range on USD/CAD just keeps giving! Now that the pair is sitting very close to the top of the range around 1.0030, I gave it a closer look with my hawk eyes. Loonie hawk eyes, that is!

You see, despite the risk aversion run these days, the Loonie seems to be one of the more resilient currencies as Canada remains a relatively strong economy. Earlier this week, Canada printed a jaw-dropping 4.7% jump in building permits instead of chalking up the expected 0.5% decline. Housing starts also came in stronger than expected at 245K in April, confirming the strength of Canada’s housing sector.

USD/CAD range trade

Technicals are also giving the green light for the Loonie as USD/CAD formed a bearish divergence right at the top of the range. And there’s a doji to boot! Oh, and did I mention that the resistance lines up with top WATR for this week?

Before I got too excited, I took a step back to figure out how I was going to manage my risk first. I decided to jump in at market with half my usual position and risk 0.25% of my account on that entry. I set another short order right at the top of the range and top WATR in case the pair still tests that level during the U.S. session.

I set my stop above the 1.0050 minor psychological mark, which seems to be the nearest resistance level to my entries. Of course, I decided to give it a little more leeway after I learned in one of my short NZD/USD trades not to put stops exactly on resistance levels.

Here are my trade details:

Short USD/CAD at market (1.0005) and at 1.0030, pt1 at the middle of the range (.9900), pt2 at the bottom of the range (.9850), SL at 1.0070.

Do you think the range will still hold or will it break this time? Hit me up before it’s too late! Oh and make sure you read our risk disclosure before you trade this setup, okay?

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  • Necrobadger

    Uh I’d got the same idea. I’m on it too, let’s see thursday’s releases…  and Friday ones too (China and employment), as well :! (To be honest, I wanted to enter at market 1.0050, but I missed it in real time, so I’m going to recover with the 1.0000 one :D)

    • happypip

      Oooh, it does look like 1.0050 was a nicer entry! My other short order at 1.0030 got triggered so I’m pretty happy with that, along with my market entry around parity. Looks like we’re in this together, so good luck to us! Cheers! 🙂

      • Necrobadger

         *muble muble* I put my stop to break even for the first pt, but this trade is becoming a real psychic challenge 😐

        • happypip

          You’re right about this one becoming a real toughie! I thought of just cutting my losses a while back but fortunately I decided to hold on until the Canadian jobs release, and now it’s up by a good amount. Gonna hold your trade open over the weekend? 

  • Zurdix

    I’ll be a follower on this one 🙂 But only if the 1.0050 gets tested again! I’m on a losing streak this week so a few sure pips back’d be nice…

    • happypip

      Yeah, with the way parity is being stubborn right now, I wouldn’t be surprised if 1.0050 gets tested again. Hope you’ll be able to bounce back from your streak soon! Good luck 🙂

      • Zurdix

        Sweet! I’ve been out all day and now I’m back home checking things out and it turns out (I saw no changes in my open orders) that this order that I left open 1.0050 SL 1.0070 TP 1.0010 got triggered in and out for a nice 40 pip profit!! sweeeeeeeet!
        I only remembered of this one thinking of your TP 0.9900 while looking at the chart with that wild swing, you got a nice profit there right? hope the other one reaches your TP as well!
        Enjoy the weekend!!

        • Zurdix

          I got another 30 pips today @ 1.0050 and TP 1.0020 but this time using more volume for bigger gains, im getting greedy on this one so i should cut back a little!! cheers

  • Frank

    Ok.  Great Trade.  Almost took this one myself at 1.0050 but did not.  Perhaps if it hits again.  In anycase your target seems very reasonable.  My inital thoughts before reading your post was short 1.0050 with sl of 1.0130 (just above long term down trend line) and tp of 99.50 or better.

    • happypip

      Aww, thanks! Looks like it’s back below parity again and I hope it stays that way until it reaches my target. I was hoping to catch that at 1.0050 too, but I got so excited and entered half at market. Good luck on your trades!

  • Sebastian

    I am still on a demo account but entered at 1.004. What a nice ride we saw! It does not happen very often that I have gained over 50 pips so I think I will close manualy and if there is a correction maybe I can hop on again. Very nice trading idea, congrats.

    • happypip

      Awesome! Congratulations on your win!

  • u5urp3r

    In today at 10042. Stochastic on 1hr,4hr and daily looks like it may be rolling over. With Europe over the weekend and the further breakdown in commodity prices today expect flight to USD and CAD to get weaker. If recent high of 10070/75 can hold we are in good shape. Good luck all.

    • happypip

      Hmm, interesting point about risks over the weekend. Do you think I should close my position entirely before the end of the week? 

      • u5urp3r

        In the end only you can answer that but given the action today I am moving stop loss down and taking some profit for a free trade. For now I definitely want to continue to let some ride as the chart is now looking awesome for the short side.

        • happypip

          Good decision on managing your risk and locking in some pips. I closed my trade entirely but I’ll keep an eye on this to see if I can reenter on Monday open. 

  • kcjonezen

    Great trade idea! I spotted your idea quickly after you posted it. After the beating I have taken the last couple weeks, I needed to hit the weekend on a high note. Nice to see the news event this morning work for this trade.

    • happypip

      Thanks for the positive feedback and for checking out my blog! 🙂

  • u5urp3r

     FYI closed at 9990 for 52 pips. Even though this looks bearish think I may be able to re-enter around 10020 again. It has bounced back well in the London close period.

    • happypip

      Congratulations on your win! Yeah it looks like it could need a stronger catalyst to make a convincing break below parity. Let’s see how this coming week will turn out 🙂

  • Anto Gj

    I also put the stop loss on that level. Closed all positions, 113 pips gain. I owe it to you, many thanks!

  • u5urp3r

    In again at 10036 yesterday. Will see how today turns out but hoping for a target of 9926. Keeping a close eye. Happy trading all.