Trade Closed: 2009-06-18 14:20
Good afternoon once again! It’s another rangebound day in the currency markets, but there was just enough volatility to bring USDCAD back up to my original entry point at 1.1350. That’s where I adjusted my stop on my remaining position, so I was closed out of my trade.
1st Half: +47 pips
2nd Half: +00 pips
Total: +0.13% gain
It’s a very small gain, but I am glad to get out with a profit because I think we’re not going to see much trending behavior for the rest of the week. Profit is always better than loss right? hehe. This range bound behavior may continue as we continue into the summer trading season. Stay tuned for possible new trade ideas!
Trade Adjustment: 2009-06-17 15:45
Good afternoon! My trade was triggered during the morning European/US trading session. USDCAD rallied high enough to trigger my orders at 1.1350, and after topping out around 1.1440, sellers pushed the pair back down to 1.1300. 1.1300 is around last weeks high and a major psychological level, so that area may hold as support. Because of this potential scenario, I have decided to lock in some profits and create a risk free trade.
At the moment, it’s not looking so good for those looking for risk as there seems to be no more “green shoots” to buy up on. We’ll see if that sentiment holds, but for now I expect continued choppiness as we get deeper in to the summer season.
The rest of the week looks light on the economic calendar with US jobless claims and Philly Fed index the only potential market moving events for this pair.
That’s it for now. Stay tuned!
Trade Idea: 2009-06-17 00:44
On the four hour chart, we can see USDCAD consolidating just below the 61% Fibonacci retracement area. Is that the reversal point? Are there more sellers than buyers waiting in that area? I don’t know, but I do know that traders may be watching that potential resistance level, and with stochastics falling out of overbought conditions, we may see that buyers have run out of steam and are ready to let sellers rule the day!
Fundamentally, we’ve see the US Dollar rally after we heard comments from government officials in Russia and Japan on their confidence and trust in US Treasuries and the Greenback. We also saw a mixed bag of data for the US as housing data came in positive, PPI showed an increase last month, but industrial production fell lower than expected. I expect the same results for tomorrow’s US CPI, since the is closely related to PPI. Canada is expected to release their readings on wholesale sales and the latest leading index number. Market expectations for the leading index are for a decline of 0.6% vs. a 1.1% drop in April, while we may see another decline in wholesale sales by around 0.7% If the trend continues to be “less worse” then we may see a short term boost in the Canadian Dollar. I expect volatility and choppiness in the upcoming trading sessions.
I like a short play based on a simple Fibonacci play and that the current retracement may be overdone. Here’s what I am going to do:
Short USDCAD at 1.1350, stop at 1.1520, pt1 at 1.1180, pt2 at 1.1010