Closed out my USD/CAD long position as the bulls had a tough time cracking a major resistance level and Canada gave us a strong positive economic surprise. Here’s a quick review.
Long-term Uptrend in USD/CAD
In mid-April, I put up long orders to buy USD/CAD if it broke above the consolidation pattern to play weakening fundies in Canada, while the U.S. saw mixed but arguably net positive economic updates at the time.
Since then, we did get a spike higher at the end of April after the dovish Bank of Canada monetary policy meeting, confirming my original thesis on the Loonie and pushing USD/CAD up to hit my buy orders at 1.3500 to put me in a full long position. But the momentum stopped there as 1.3500 as both the U.S. and the Loonie kind of moved back into choppy price action over the last couple of weeks.
Then last Friday, we got a positive surprise from the latest Canadian employment update as Canada adds a record 106,500 jobs in April, prompting a short-term spike lower in USD/CAD after the news. With economic conditions improving in Canada, including that monster jobs report, I decided during the morning U.S. session on Friday to not be short Canadian dollars for now since this will likely prompt less dovish rhetoric from the BOC going further. And again, with the 1.3500 holding the bulls at bay, it made sense to just cut this trade off for now until a true break-and-hold above that level occurs. So, I decided after the Canadian jobs data to close the trade manually (1.3484) for a very tiny loss:
Total: -16 pips / -0.08% loss on 1.00% risk
What do you think? Did I close too soon or was it a good idea to just cut it and move on? Let me know in the comments section below!
And so this leaves me with my open trades in CHF/JPY and NZD/USD, which are still both in profit but took a bit of a hit in recent sessions. Perfect time to add or no? I’ll do a bit more work and if I do feel like it’s time to adjust, I’ll post up an update soon. Stay tuned for that and new potential ideas coming soon…and as always, good luck and good trading!
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