Forex Trade Adjustment: 2014-07-22
Since jumping in short last week, sellers continue to feed into the downtrend to push the pair lower and nearly retest July lows. It’s time to do some trade management.
Original Trade Idea: Buying Loonie on a Pullback
There’s been a lot going on with currencies and the financial markets in the past week thanks to geopolitical tensions provoking forex traders to make moves in various ways. More importantly for EUR/CAD, we’re also seeing continued weak economic data on the forex calendar from Europe, as well as surprise jump in inflation from Canada on Friday.
This has brought the pair to nearly retest the minor support that held around 1.4450 last week and my trade up roughly 0.50%, which means it’s time to do some trade management. Given the recent economic data, I think the downtrend is still intact and likely to help the pair break lower, but if buyers are willing to take over here, then I have to recognize that.
For now, I’ve moved my stop to my entry price at 1.4580 to create a risk free trade. If the pair breaks, I’ll look for a retest-and-hold situation to possibly add to my position and/or trail my stop, but if it holds as support and reverses back to the upside, I’ll look to take profit manually and reassess the pair. We’ve got European PMI data this week to be the next potential catalyst, so I may make another adjustment before the end of the week.
I’ve also got my CHF/JPY short on that’s currently in a small profit and picking up momentum lower thanks to today’s trading environment. I’m waiting for Tokyo CPI this Thursday to make a possible adjustment as it could have a big effect on the Japanese Yen. Stay tuned!
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