The latest employment data for both the U.S. and Canada is coming soon, potentially giving traders another shot at the uptrend at a better price.
USD/CAD Rising Lows Retest?
As mentioned above, we’ve got the jobs numbers for both countries coming up on Friday, which means a likely boost in volatility for USD/CAD. And with the current trend pointing higher since the beginning of 2020 when USD/CAD was trading just under 1.3000, I’m looking for a chance to go long at a better price.
On the one hour chart above of USD/CAD, we can see the pair recently found strong support around 1.3330, before popping higher today on the Bank of Canada’s decision to cut their interest rate policy by 50 basis points, a day after the Federal Reserve did the same thing to combat the negative economic effects of the Coronavirus. If the market falls back to the 1.3330 area and we get a positive read from the U.S. jobs report while the Canadian report disappoints, then I’d like to go long on the pair to play the current price trend higher, and the likelihood traders will continue to favor the Greenback over the Loonie as a weak Canadian jobs report will likely draw in speculation of more cuts from the BOC.
So, I’m going to set orders to play a retest of that area, but I will cancel those orders quickly if that Friday scenario I just described above doesn’t play out. Here’s what I’m going to do:
Long half position USD/CAD at 1.3330, max stop at 1.3260 with 0.50% risk, max target at 1.3440
I’ll be risking 0.50% of my account with a potential 1.57:1 return-on-risk. Again, I’ll cancel the orders if my preferred scenario doesn’t play out, and if I’m in the trade before the event, then I may adjust (close out full or partial position / roll stop) right before the numbers are released.
That’s it for now. Stay tuned for updates and as always, remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly. Create your own ideas and don’t simply follow what I do.
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