Close Trade: 2009-08-28 11:48
Close remaining position at market (1.0870)
1st Half: +80 pips
2nd Half: +60 pips
Total: +0.54% gain
Trade Adjustment: 2009-08-27 14:56
Good afternoon! After a few days of waiting, it looks like everything is falling into place for my short USDCAD trade today as US GDP sent currencies all over the place! With the trading week quickly approaching I have decided to take some profits off of the table and adjust my stops.
US GDP was the Forex news of the day as it came in at -1.0% versus the forecast number of -1.4%. Initial jobless claims and continuing claims both came in better than expected as well. Traders initially bought some Greenbacks, but it turned into a US Dollar selloff as the European trading session ended.
Time for Another Short Play? 2009-08-25 13:22
Good afternoon Forex friends! As I said after last week’s trade, I would look to short USDCAD once again if the opportunity presented itself. It looks like that opportunity may come in the next couple of trading sessions as it looks like the current Loonie rally has run out of steam for now.
I have the four hour chart up, and stochastics are indicating the downtrend is oversold and are now turning higher out of oversold territory. Does this mean we will see a tracement? You can never know for sure, but if it does I used the Fibonacci tool to pinpoint possible resistance area. The 38% – 61% retracement sits right around that broken trendline, so I like the odds of potential resistance there and a swing move back to the downside.
Fundamentally, it’s the same old story of high US deficits and weak economics slowing down any prospects of US Dollar strength, but we have seen improvements on economic data recently – most notably on housing data. On the other side of the border, Canada posted another month of retail sales gains showing that they may be on the road to recovery as well. Now, while we are seeing improving data from both sides, I am still more bias towards Loonie strength because of their tie to oil prices. While demand will always fluctuate for the “black gold,” it makes sense that oil prices could remain strong in the short term as the world continues to need the energy and products that oil brings. Oil has recently clocked in highs around $75, but after a few days of going no where, we are seeing weakness today as oil trades currently trades around $71.50 a barrel at the NYMEX.
So, it may be time for a bit of a pullback after recent strength in both the Loonie and Oil, and if I do see it, I will scale into a short position in between 38% – 61% Fibonacci area. My stop will be one 130 pips (daily Average True Range), and I will target previous support areas. Here’s what I am going to do:
Short USDCAD at 1.0930, stop at 1.1060, pt1 at 1.0800, pt2 at 1.0650
It looks like the Greenback is rallying strong at the moment, so I may get to see my orders triggered soon than I thought…. stay tuned!