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!
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.
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.
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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