Woohoo! Lockin’ in more pips on this baby! EUR/CAD keeps pushing higher on improving euro zone fundamentals and downside pressure on oil prices. Think it’s a good idea to add to my long position? In case you missed it, don’t forget to review my initial trade setup first.
I was looking at a slightly steeper short-term trend line with my market entry just above the 1.4300 mark, but it turns out the pair is forming a new one these days. In my previous update, I’ve rolled my stop higher ahead of event risks from the French Presidential debates and now I’m adjusting it once more to lock in a few gains.
It looks like EUR/CAD is gearing up for another quick pullback to the support area, probably around the 1.4400-1.4450 levels. I’ve placed my stop safely below the trend line and 1.4375 area of interest so that I can be out of the trade in case all those floors are broken on a sharp selloff.
There’s not much in the way of top-tier economic releases from both the euro zone and Canada this week, but there are still some event risks that could come into play. For one, BOC Governor Poloz has a speech coming up and any effort to inject confidence in the Canadian economy and its energy sector could spur a Loonie rally.
And of course, who can forget the potential volatility stemming from the official start of the Brexit negotiation process this week? U.K. Prime Minister Theresa May is set on invoking Article 50 by March 29 and the EU has promised a swift reply, so market participants are likely to read between the lines of their statements to get clues on how the talks might turn out.
Any hint of hostility could trigger another round of losses for European assets, including the shared currency, so I’ll play it extra careful and be quick to hop out of my long trade if once I start seeing long red candles. In any case, this stop adjustment is enough to make this a risk-free trade (with some change) but I’m still open to the idea of adding on a bounce off the trend line since I risked only 0.25% with this one.
As always, don’t risk more than 1% of your account on a single trade and make sure you read our risk disclosure if you’re thinking of taking the same setups.
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