I guess I can’t say thanks to Draghi for the second time in a row, huh?
Just as we had expected, the ECB’s interest rate decision caused crazy price action among our favorite currency pairs. Prices of high-yielding currencies shot up moments before the ECB head honcho took center stage, and then fell down faster than a zero gravity amusement park ride when he only hinted at more action coming up in September.
Ha! And I thought “stayed tuned” lines can only be heard from TV series and reality shows!
As it happened, USD/CAD only tipped an intraday high at 1.0085, which is a couple of pips away from my 1.0090 order. Boo! I decided to cancel my orders since the big NFP report is coming up in a few hours.
Besides, I’m not liking the reversal-like candlesticks on USD/CAD’s daily chart. Not only did the pair bounce from parity, but it also looks like it found support at the bottom of the descending channel!But don’t worry, I’m still watching the important levels for the pair. I might even point them out in next week’s edition of my Comdoll Trading Kit. But for now, this Happy girl is ready for the weekend.
How about you? Did Draghi’s speech help or hinder your way to profits? Or did you stay out completely? Let me know!
Trade Idea: 2012-08-02 2:54
With my all-time favorite USD/CAD falling channel still intact, I’m looking to join the downtrend on a retracement!
As you can see from the 4-hour time frame, the 38.2% Fib level lines up with a former support level just below 1.0100 while the 50% Fib level is right in line with this week’s top WATR.
Aside from the technical lining up neatly, I’m also digging the fundamental factors that support this potential short trade. Even though Canada isn’t set to release any economic reports over the next couple of days, I have a feeling that the higher-yielding Loonie could get a boost from risk appetite in case of ECB head Mario Draghi starts giving upbeat remarks during today’s ECB policy decision.
Recall that the ECB head’s testimony had quite a huge impact on market sentiment last week when he committed to protecting the euro at all costs. He could echo the same tone during the press conference around 1:30 pm GMT today.Of course, I also noted that the U.S. NFP report is due tomorrow and that another round of weak jobs data could trigger a massive dollar selloff, which would also be good for my short USD/CAD trade. After all, the Fed is showing a bit more inclination towards further easing and five consecutive months of poor employment data might push them over the edge.
Here’s my trade plan:
Short USD/CAD at 1.0090 and 1.0120, stop loss at 1.0170, profit targets at 1.0000 and .9970.
I’ll be risking 0.5% of my account on each position and if you plan to join me, you should take a look at our risk disclosure first.
I’m crossing my fingers that I could have another winning trade to follow my previous AUD/USD win. Do you think I can make it? You know where to reach me!
Have fun and good luck trading this week, friends!
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