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Trade Closed: 2008-02-19 09:23

Volatility returned to currencies today as many pair traded beyond their daily ranges at the beginning or the Euro/US overlap. USD/CAD found a bid around 1.0020 – 1.0030 and rallied back to 1.01, closing our trade out. Canadian CPI data came in weaker than expected along with Wholesale Sales.

1st half: +50 pips
2nd half: +00 pips
+.50% gain

I don’t see USD/CAD moving higher any further, and if anything, it may move back below 1.01 on profit taking and strong commodity prices. Weak US Dollar sentiment is still in play, so we may have another opportunity to jump in short around the current levels and target parity once again.

Stop Adjustment: 2008-02-18 17:18

Our first profit target was hit, on this slow trading day, at the beginning of the US trading session. Half our position was closed for a profit at 1.0050 and we have adjusted our stop on the remaining position to breakeven.

Adjust stop on remaining position to breakeven. We will close trade at .9950.

The low volatility was due to the lack of any significant reports and the US holiday, but we should see volatility tomorrow as we have Canadian CPI data set to be released. We will continue to hold as we now have a risk free trade. Stay tuned and good luck!

Trade Update: 2008-02-17 16:00

Well, it took a while, but our short entry order to sell USD/CAD was triggered Friday as we saw a huge 200 pip rally bring the pair to 1.01. The pair met resistance there and fell towards our first profit target at 1.0050.

Be ready to close part of the position at 1.0050 at the open of this week’s trading as we may hit it pretty soon. And be sure to adjust stops at 1.0050 as we may see buying support in that area and the upward momentum from Friday may continue.

Stay tuned and good luck!

Trade Update: 2008-02-12 14:53

Goodness! It looks like the market was a little more eager to sell than I was as USD/CAD found resistance around 1.0040 and fell below parity during the European session into the US trading session.

The pair found today’s bottom near the bottom of the range I spoke about earlier at .9950 and rallied back to where it started at the end of the US session yesterday.

Again, we will probably continue to see this type of price action for the rest of the day, but with major US data coming out for the rest of the week that may change.

For now, I think we’ll see resistance once again around 1.0020 – 1.0040 and a return to parity. I will keep my open orders open for now, but may make adjustments as we approach the news events starting tomorrow. Stay tuned my friends!

Trade Idea: 2008-02-11 16:43

Like many of the other major pairs, USD/CAD has been stuck in a range for the past couple of weeks – moving back and forth between .9900 and 1.0100. With recent positive data for the Canadian economy, will we continue to see a tug of war between buyers and sellers around parity?

In the last few days, we’ve seen a lot going on to think the Loonie should make another run. Positive employment data and growth in housing prices coupled with a higher interest rate makes the Loonie very attractive against the Greenback. Also, rising prices in one of Canada’s main exports, oil, should help put pressure on USD/CAD as well. So, why aren’t we seeing the pair drop lower? Recent broad based US Dollar strength and concerns of the US economy are the answer.

The US is the biggest trading partner for Canada (US takes about 75 percent of Canadian exports), and a slowdown in the US can mean a big slowdown in Canada. Economic growth is the main concern at the moment for the Bank of Canada, and traders are speculating the the BoC may have to cut rates, despite inflation.

So, what’s the trade?

Until we have a clear picture of how much the Canadian economy will be affected by their neighbors to the south, we see more range bound action, and with recent positive data for the Loonie, we see sellers waiting at the top of the range to jump in.

Short USD/CAD 1.0100, stop at 1.0150, pt1 at 1.0050, pt2 at .9950.

Remember to never risk more than 1% of your account on any single trade. Adjust position sizes accordingly.

I may throw in a long trade in case the pair does move lower first and depending on how it reacts to .9900. Stay tuned for updates! Good luck my friends 🙂

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