Whee! A winning trade for me! Thanks to strong economic figures from Canada, USDCAD dropped all the way down to my profit target in a jiffy!
Apparently, it wasn’t just me who found the Loonie sweet and tasty!
After the Bank of Canada hiked interest rates by 25 basis points to 1.00% yesterday, USDCAD tumbled to an intraday low of 1.0346 which was 4 pips below my profit target.
Luckily, traders also seemed to have found the central bank’s statement less dovish than they expected and made it all the more awesome for USDCAD bears like me!But that wasn’t all! Pip Diddy mentioned in his blog earlier today that the Ivey PMI also helped the Loonie rally when it came in at 65.9, which is so much higher than the 55.5 forecast.
Good thing I wasn’t too impulsive since I decided to wait for the pair to retrace back up the 61.8% Fib. Weee!
Can you guess who’s happy with her pips? I think I should change my name to Super Happy Pip now. Ha!
P/L: 130 pips / +1.5%
Trade Idea: 2010-09-07 3:39
Sure, I missed out on a could’ve-been-really-profitable short USDCAD trade but not all hope is lost! The pair could still retrace up to the 61.8% Fibonacci level, which is close to the neckline of those neat double tops on the 4-hour chart.
Stochastics are still moving upwards from the oversold area, suggesting that the pair has enough momentum to climb to my entry point.
Besides, I took a quick glance at the economic schedule for the week and noticed that plenty of catalysts are in store for Canada tomorrow. First up, the Bank of Canada is set to make its monetary policy announcement.
From what I’ve heard, it seems like there are more analysts who have a little-miss-sunshine attitude with regard to the central bank’s announcement than those who don’t. Many are predicting that the BoC will hike interest rates for the third consecutive month from 0.75% to 1.00%. So I’m keeping my fingers crossed that they’re right.
Aside from that, the Ivey PMI and building permit data are due. I’m keeping an eye out for those reports starting 12:30 pm GMT since they could provide extra volatility for USDCAD.
I placed my stop loss above the 1.0500 handle and my profit target near the recent low of 1.0340.
Here’s what I’m cooking up:
Short USDCAD at 1.0480, stop loss at 1.0560, profit target at 1.0350.
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