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I had to cut losses on this one quick, as price already broke below the long-term floor. Good thing I only risked a tiny bit!

Long USD/CAD Idea

Loonie bulls have been shrugging off crude oil price declines and the buildup in stockpiles these days, confirming that the Canadian currency is trading mostly on improved fundamentals and the BOC’s hawkish shift.

That change in monetary policy bias shown by policymaker Wilkins and supported by head honcho Poloz was one of the reasons why I felt iffy about buying this pair, but the neat tech setup and the crude oil factor still convinced me to put a tiny position on the line.

USD/CAD Daily Forex Chart
USD/CAD Daily Forex Chart

At that time, I was convinced that dollar demand would eventually pick up due to renewed Fed rate hike expectations and the return in focus to the Trump administration’s reform agenda. But as it turned out, the healthcare bill vote delay once again dampened hopes of fiscal stimulus, and this was echoed by the IMF’s U.S. growth downgrade.

With that, I decided to get out of this trade before my losses increase, cutting my position once price made a convincing break below the 1.3200 mark. Now I’m thinking of taking the opposite trade by shorting and catching the downside momentum.

However, I probably should sit on my hands for a bit now that the end of the week, month, and quarter could inspire profit-taking. This might be enough to take the pair for a retest of the broken support at which I could catch a better sell price.

For now, here’s the damage:

P/L: -90 pips / -0.16%

Things haven’t been looking so good on my account these days as I’ve taken more than a couple of risk-off plays when the market environment is starting to shift. I couldn’t help it, those trend setups were too tempting like a cute top on sale!

I think I gotta regroup for now and crunch the numbers for my Q2 performance. Yep, we’re halfway into 2017, comdoll buddies!

Cheers,

Happy

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