Trade Closed: EUR/CAD Bounce to Resistance?
At the beginning of April, I got bearish on EUR/CAD on the idea of potential weakness for the euro due to weakening economic data and policy stimulus from the ECB, and short-term bullish on CAD after a surprisingly optimistic speech from BOC Governor Poloz and the recent strength in oil. I waited pullback to enter, picking the strong area of interest around 1.5050 for my first nibbler position, which was eventually triggered a few days after posting my idea.
Since then, EUR/CAD has been a snooze fest as euro bears have run out of steam despite the continued weak euro zone data and stimulus coming from the ECB, and CAD bulls were no where to be found as traders got dovish on the potential for the Bank of Canada to be open to rate cuts (or at least no longer consider rate hikes). EUR/CAD pretty much traded around 1.5050 the whole month and failed to break the 1.5000 level.
With a new month here, which means a fresh round of economic data ahead, I decided to close this trade out manually (1.5047) just under break even to free up some capital and move on to better opportunities.
Total: +3 pips
Looking back, I had several chances to add my second short position on moves higher to 1.5100 – 1.5150, which traders handily rejected on each retest, but like I said, euro sentiment was no longer tanking while Loonie bulls were no where to be found, even with oil making new highs. It just didn’t feel right to add from a market sentiment perspective. In hindsight, that was the smartest move and would have turned this trade into decent winner. So, that’s my bad, especially after the second failed retest, and going forward, I may consider shorting EUR/CAD in the that area if it retests once again.
Trade Update: Wedge Breakdown on NZD/USD
Last week, I put up an idea to short NZD/USD after a wedge breakdown on the daily time frame, but only if the market could bounce higher after a very strong move. Eventually the market did make a move higher to trigger my first short order at 0.6650 with 0.50% risk, and after a disappointing New Zealand jobs update and a not-so-dovish FOMC monetary policy statement today, NZD/USD is back in the downtrend and my trade is already in profit.
Next up is the monthly U.S. employment update as a catalyst for the next potential move for NZD/USD, and if it is bullish for the Greenback, my second short order at 0.6725 is not likely to get triggered. If that situation plays out, I’ll look to cancel those orders and create a new short order below the previous swing low around 0.6580. If the jobs data is bearish, I will cancel the short orders at 0.6725 and possibly close out the position all together depending on the jobs data. Stay tuned for updates after the jobs report and as always, good luck and good trading!
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