Trade war jitters are back in play, weighing heavily on commodity currencies once more. I’m already on the lookout for an AUD/JPY selloff, and this time I’m looking to short the Loonie, too.
Long GBP/CAD Idea
This one looks like a textbook break-and-retest play as price is bouncing off the rising trend line, which lines up with a Fib retracement level. To make this deal even sweeter, this area of interest also lines up with the 1.8100 major psychological support.
I’m considering hopping in at market with a stop below the lowest Fib and an initial target at the swing high just above the 1.8400 handle. After all, stochastic is pulling up from oversold conditions to show that buyers are regaining the upper hand.
Early this week, China announced a set of tariffs on a wide range of U.S. imports, preempting the list of Chinese products the White House plans to slap higher duties on.
This sparked another bout of risk aversion during the New York session, weighing heavily on commodities and equities. The Loonie is on even weaker footing as it faces a potential rise in oil output from Iraq.
As for sterling, the U.K. industry PMIs could be the main event risks for the rest of the week, although I’ve got a good feeling that Brexit headlines could still have a say every now and then. Canada has its jobs report due on Friday and this could mean more volatility for this pair also.
Given these event risks, though, do you think I should just hop in at market and make adjustments along the way?
See also: Q4 2017 Trading Performance Review
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