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
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!