Even though I missed the previous USD/CAD retracement to 1.3250, I’m still watching the pair’s downtrend and ready to hop in the latest forex pullback. I’m seeing a descending channel forming on the 4-hour time frame so I decided to short at market when the resistance held.
I’ve got a bullish Loonie forex bias these days since crude oil stockpiles have fallen and some OPEC members seem willing to cap production ahead of the much-awaited OPEC meeting in mid-April. Positive speculations leading up to their pow-wow could keep the oil-related Loonie supported, possibly leading the BOC to stay optimistic in their rate statement next week.
As for the U.S. dollar, the FOMC minutes did very little to give it a boost since risk appetite seems to be in play. Besides, majority of the members still voted to keep interest rates on hold, citing concerns that the pickup in inflation might not be sustained. Heck, not even the upbeat NFP report released last week was able to keep the dollar afloat!
I was able to short at market at 1.3075 and I set my stop past the latest test of the channel resistance. I’ll be aiming for the bottom of the channel around 1.2825 but I’ll be watching this pretty closely and might consider exiting early ahead of the BOC statement or the actual OPEC meetings.
Here are the deets:
Short USD/CAD at market (1.3075), SL at 1.3275, PT at 1.2825.
I risked 0.5% of my account on this forex setup and I’m going for a 1.25-to-1 return-on-risk. Don’t forget to look at our risk disclosure if you’re planning on joining me!
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