USD/CAD: Support-Turned-Resistance Play – Adjusted SL Hit!

Trade Closed: 2013-07-19 7:00

Good morning!

A few days ago I told you that I had moved my stop loss to break even just before the BOC’s interest rate statement. Unfortunately, price action didn’t go in favor of my trade even though the central bank kept its rates steady at 1.00%

You see, new BOC head Stephen Poloz also revealed in a statement that they’re expecting the economy to be choppy in the near term, and that they are likely to keep their rates steady in the foreseeable future.

USD/CAD Trade Closed

USD/CAD ended up finding support at its Asian session low before it went back up to test its daily highs and took out my stop loss orders. Good thing that I had adjusted my stop loss level! Although I didn’t get any pips, I believe that it was the right decision to adjust my stop loss given that Bernanke was also due for a speech around that time.

That’s it for me this week! How about you? Got any memorable trades this week? Feel free to share!

Trade Update: 2013-07-17 7:13

Thanks to the rebound in Canadian manufacturing sales, USD/CAD showed enough downward momentum and I was able to catch a short entry. May manufacturing sales rose by 0.7%, as expected, while the previous month’s figure was revised to show a smaller decline of 2.1% from the previously reported 2.4% drop.

USD/CAD Trade Update

I was able to enter a short trade below the doji’s low, somewhere around the 1.0420 level. I set a 50-pip stop and I’ll be aiming for the previous lows near 1.0320 for a 2:1 trade.

However, I’m going to manage my risk ahead of today’s top-tier events. For one, the BOC is set to make its monetary policy decision and it’ll be Governor Stephen Poloz’s very first one! It’ll be interesting to see if he will side with the hawks or with the doves, as this would be indicative of the BOC’s future monetary policy stance.

Aside from that, Big Ben is gearing up to give a testimony later today, and market participants are hopeful that he will set the record straight regarding the stimulus taper plan. If he insists that the Fed is likely to reduce bond purchases in Q4, the dollar could be back to its rallying ways!

With that, I’m moving my stop to my entry in case the dollar makes a sudden jump in today’s U.S. session. Do you think USD/CAD has a chance to reach my profit target though?

Trade Idea: 2013-07-16 7:32

I got faked out on my AUD/USD trade last week, so I’ll be a little more careful about buying another comdoll this week.

Fundamentally, I think that the recent strength in oil prices as well as the FOMC’s somewhat dovish minutes would boost the Loonie against the Greenback, at least over the next couple of trading sessions. I’m also looking at Canada’s manufacturing sales report due in a few minutes, which is expected to show a 0.7% increase for the month of June, stronger than May’s 2.4% decline.

USD/CAD Trade Idea

As for USD/CAD’s technical setup, I’m looking at a possible evening star around the 1.0450 minor psychological handle. Not only is it a previous support, but it’s also near this week’s top weekly ATR level. Oh, and have I mentioned that it’s also near potential Fib resistance areas?

Unlike in my AUD/USD trade last week, I’ll probably wait for more signals before I jump in on this setup. More specifically, I’ll wait for Stochastic to complete a bearish divergence and maybe for more comdoll-bullish reports to pop up.

Here’s my plan:

Short USD/CAD at 1.0450, stop just above 1.0500, profit target at the bottom weekly ATR near last week’s low. This would give me a risk ratio of about 2:1 if it plays out as expected.

What do you think of this setup? Don’t forget to read the risk disclosure if you’re planning on taking this trade with me!

Happy time

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  • John

    You might want to watch out for the BOC monetary statement and press conference tomorrow.

    • happypip

      Thanks for the heads up! I’m moving my stop loss to break even to protect my profits! :)