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Taking a shot on EUR/CAD this month with top tier events from both Canada and Europe coming soon.

EUR/CAD Fib Short

EUR/CAD 1-Hour Forex Chart
EUR/CAD 1-Hour Forex Chart

Starting off the new year with this setup on EUR/CAD, which should see some action over the next few weeks on top tier economic events ahead. This week we’ve got the latest Canadian jobs data to likely get the Loonie moving, followed by monetary policy statements from both the Bank of Canada and the European Central Bank coming later in the month.

Hopefully, this potential volatility fuels my bias in favor of the Loonie over the euro given Canada’s resilience to global trade and geopolitical uncertainty, versus Europe’s weak economic outlook. And it looks like I may be able to jump into this trade at a better price as EUR/CAD is currently bouncing from recent lows around 1.4450 to retest a minor area of interest around 1.4550. Will the bears hold the line and reverse the market lower?

Of course we won’t know until we get there, but I think if the Canadian jobs data surprises us with positive jobs numbers, the market could return to the downtrend.  Oil’s recent strength may be a supporting factor as well that gives this trade a little bit better chance of success.

With that said, I’m looking to hop in if the market gets back up to the strong level of interest; just being a little bit safe ahead of the Canadian jobs data. My max stop will be above the previous swing high at the end of December, while my max target will be the strong support area seen back in September. Here’s what I’m going to do:

Short half position at 1.4570, max stop at 1.4730, max target at 1.4410

I’m only risking 0.50% of my account on this trade and I’ve got max potential return-on-risk of around 1:1. Depending on what we get from the latest data, central bank events, and geopolitical developments, I may turn this into a longer-term swing trade to shoot for a bigger max gain.  If my entry order does not trigger by the end of the week, I will close down my open orders and close this idea.

What do you guys think? Are you watching  EUR/CAD for a potential short position as well? Let me know in the comments section below!

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.