USD/CAD – Close Open Orders

Close Open Orders: 2008-07-11 01:01

It looks like we weren’t able to get much of a retracement off of downward momentum as USD/CAD found sellers around 1.0135 and fell lower from there. We have a potentially volatile event tomorrow with Canadian employment data, so I’d like to remove our open orders for now as it is unknown what the numbers and market reaction will be.

Close open short orders. No trade.

So, it looks like we didn’t miss much as the pair briefly fell below 1.01. Stay tuned as I may have a trade idea for this pair after Canadian data is released, along with the US trade balance data tomorrow morning durning the US trading session.

Trade Idea: 2008-07-09 18:56

comdollsff

The Greenback fell pretty hard against the Loonie today, finally breaking out of the consolidation behavior USD/CAD has been in for the past couple of weeks. Is this the start of a new trend or will we see more ranging action?

Fundamentally, I like the Loonie over the Greenback as recent data out of Canada have been showing things may not be so bad economically – most notably housing starts surprising to the upside today. This, along with oil prices staying afloat, the Loonie looks to be a good buy against the Greenback – for now.

The US Dollar is currently under pressure as a “flight to safety” play has materialized after reports of Iran testing a long-range missile is bringing geopolitical risks to the minds of traders. This event has supported oil prices and causing a sell off in carry trade, taking market interest away from the US Dollar and moving it to “safer” assets such as gold and the Swiss Franc. We also have renewed concerns of credit tightening in the US putting pressure on the Greenback, as this wards off speculation of a rate hike this year.

On the chart, we can see USD/CAD today’s strong move lower, breaking the consolidation and rising trendline. It looks like the move may retrace and we may be able to get in at a better price to play the fundamentals and break. If we see a retracement up to the popular Fibonacci levels, we’ll short from there…

Short USD/CAD 1.0165, stop 1.0220, pt1 at 1.0100, pt2 at 1.0050

Remember to never risk more than 1% of your account on any single trade. Adjust position sizes accordingly.

Stay tuned for updates and good luck! :)

  • arrdog

    hey comdolls,
    i usually agree with your analysis, but i have to disagree with this one. the canadian economy is the first of the g8 countries to report negative gdp growth this year. annndd i believe canada relies on 75% of its exports to go to the us. with consumer spending shrinking in the us, and the dollar weakening against the cad, won’t this ultimately hurt the canadian economy?

    i agree that oil is on the rise, but the correlation is starting to break down. if oil stays under $150, does shorting the canadian look more attractive to you?

    annnnd the usd/cad is near a 30 year low!

  • arrdog

    hey comdolls,
    i usually agree with your analysis, but i have to disagree with this one. the canadian economy is the first of the g8 countries to report negative gdp growth this year. annndd i believe canada relies on 75% of its exports to go to the us. with consumer spending shrinking in the us, and the dollar weakening against the cad, won’t this ultimately hurt the canadian economy?

    i agree that oil is on the rise, but the correlation is starting to break down. if oil stays under $150, does shorting the canadian look more attractive to you?

    annnnd the usd/cad is near a 30 year low!

  • happypip

    Hey arrdog… You have a lot of good points, some of which I would maybe apply to a longer term trade. This is a short term trade idea, and the current sentiment is that commodities (especially oil) demand is still high, even as economic growth slows (People will still need gas for their car and food to eat, right?). Along with the other points I made in the analysis, the Loonie also has a positive interest rate advantage over the Greenback. For the short term, a short play looks like way to go in my humble opinion… thanks for your input!

  • happypip

    Hey arrdog… You have a lot of good points, some of which I would maybe apply to a longer term trade. This is a short term trade idea, and the current sentiment is that commodities (especially oil) demand is still high, even as economic growth slows (People will still need gas for their car and food to eat, right?). Along with the other points I made in the analysis, the Loonie also has a positive interest rate advantage over the Greenback. For the short term, a short play looks like way to go in my humble opinion… thanks for your input!

  • foricks

    For once, I am glad I slept through your update…The news put me into the trades after 0700 est. I took the 50% and 62% fib retracements as two entry points, but I closed half at +9 and took second profits at your first TP. Looks like your analysis was right on, but a little risky with major news events this morning. I promise to be more attentive in the future. For today, I get to laugh all the way to the pip bank.
    Thanks again, you’re a real Com-Doll!

  • foricks

    For once, I am glad I slept through your update…The news put me into the trades after 0700 est. I took the 50% and 62% fib retracements as two entry points, but I closed half at +9 and took second profits at your first TP. Looks like your analysis was right on, but a little risky with major news events this morning. I promise to be more attentive in the future. For today, I get to laugh all the way to the pip bank.
    Thanks again, you’re a real Com-Doll!

  • happypip

    Haha, congrats foricks…sometimes its good to “sleep on the job” i guess :)

  • happypip

    Haha, congrats foricks…sometimes its good to “sleep on the job” i guess :)

  • arrdog

    do you think the dollar will be able to break the resistance of the ascending triangle forming on the daily chart? i am thinking in the next 2 weeks. i really cant see it breaking the rising trend line. what do you think?

  • arrdog

    do you think the dollar will be able to break the resistance of the ascending triangle forming on the daily chart? i am thinking in the next 2 weeks. i really cant see it breaking the rising trend line. what do you think?