On to the next trade indeed! USD/CAD looks like it’s bouncing off the channel that we’ve been watching since last week. Interested? Hihihi
Looks like we’re right back where we started from last week, testing the channel support. It’s like climbing a ladder and going down the slide, WEEEEEE!
My Newb thought process is to wait until Thursday’s fundamental reports, 2 from the US (Jobless claims and Chicago PMI) and the Canadian GDP to come out in the morning NY session. All 3 reports come out basically within the span of an hour. Then place a trade.
But my technical thought process says to watch the next couple of 4hour candles and see if this is going back up. The next level of support is ~ .9670/.9650 and given the current price is .9707 thats a fairly tight stop.
So now what to do?
I think the best thing to do would be to wait for those reports like you said. Risk appetite is looking really strong right now, mostly because of the approval of Greece’s austerity program. Then Canada just printed a really good CPI report, which means that plenty of Loonie traders are anticipating a rate hike to come soon. Another strong report from Canada could trigger a break of the .9650-.9670 support.
Just my two cents. I’ll be keeping a close eye on those upcoming reports though
I think a bunch of us got clobbered by this pair last week but I’m not giving up on it just yet! What do you guys think of this break and retest strategy?
USD/CAD already broke way below that rising trend line on the 4-hour time frame but it seems ready to retrace. I put up my Fib tool on the recent drop and noticed that the 38.2% level lines up with the .9700 major psychological level. Do you think this will be a good area to short?
Recent data from Canada has been very strong, particularly the CPI which is at its highest in 8 years! Upcoming reports (Ivey PMI, employment report) could beat expectations, too.
Any thoughts on my trade idea?
After the very strong selling off from 27th June (the Daily chart will make very happy viewing for anyone who shorted that high test on 27th June!) I think that is is highly likely that we will get a decent retracement now. As we are in a strong overall downtrend, I won’t look to take it long, personally, but I do like the idea of shorting following the retracement. It is slightly a case of watching to see how Price Action looks over the next few days, but your suggested 0.9700 level is a good candidate. We also have the Weekly Pivot at 1.9796, which lends extra weight to the idea. The Pair has previously hit Resistance at this level. I have 0.9648, 0.9722 and 0.9811 on my chart as levels from previous Price Action. Given that the current low has failed to take out the low of 2nd/3rd May, I doubt I will short from 0.9648, but I will be watching the 0.9700 level, yes. Of course, it is very possible that Price will climb right back up towards the 0.9900 level before falling back, but that is just one to monitor. If I try an Entry lower than that but get stopped out I would have another go up around there.
But with an eye on Friday being NFP, of course - I don’t trade those Fridays, and the 0.9700 level could come into play around then, sigh.
I’m watching those levels as well, particularly the .9700 and .9800. If I short there, I’ll probably place my stop above .9900 then aim for .9600. Of course shorting at .9800 would offer the best reward-to-risk ratio, but let’s see if price reaches that area.
NFP Friday could push the pair to those levels so I’m setting my orders just in case. How come you don’t trade those Fridays? Not a huge fan of extra volatility? Haha.
Yes, exactly that - I find that the really big news announcements/events don’t always have the effect that one expects, despite analysis (the Yen gave both Short and Long pips following the earthquake, for instance) so I just stay out. I see this as a probability game, I like high probability trades, so if there are too many variables that I don’t feel confident predicting, I just stay away. I have back-tested this, and while I could make some heroic pips on some days, I would just get stopped out on others, and even the ratio between those two options is not something I feel I can predict with sufficient accuracy.
I see this as a long-term career, I judge each month and year as a whole. I make a double-figure percentage return each month trading as it is, my account is growing as well as providing an income - so I just avoid some of the bigger variables, why mess with what works?
I realize that a lot of people like to trade NFP, and they are happy that they make it work, but I prefer to avoid it. It’s only one Friday a month, and I am generally in a happy place by cop Thursday, anyway, as there is generally something working - EUR/USD, GBP/CHF and GBP/JPY have been my trading focus this week, sorry for my Comdoll disloyalty!
So this Friday I am taking my wife and youngest (pre-school) son out to lunch, then will reenter the fray on Monday. Beats working for a living!!
Aww, that’s so sweet SimonTemplar! Enjoy your time with your family, and I’ll catch up with you next week!
Hmm, pretty quiet in my comdoll corners lately. Don’t tell me y’all are also spent the last few days re-reading the Harry Potter books like I did! How’s everyone doing so far?
Loonie prices are making Lower Low on daily chart. I think it will reverse very soon.
Let be patient to wait for bottom fishing. Certainly quiet now.
By the way, why I hardly see people use daily chart in Forex?
I can’t speak for others, but personally I never place a trade on any timeframe without consulting the Daily.
As for USD/CAD I am staying out for now - agree that we could be looking at a reversal, but with the fundamentals giving such mixed signals, and the charts looking so unclear, I am waiting for an overall bias to emerge. This Pair has been giving great Short setups all year - after such a concerted move, it is very common to see some indecision. I think that we are in that phase right, and I don’t feel like giving back some of the pips I made by jumping in too early. Half a dozen good trades a month can give a double figure percentage return, after all!
This pair made a nice jump up yesterday and I was looking to go short. But things never quite materialized. even though I started a position it stayed in a tight range and that had me worried with the jobless claims coming out today. So being the newbie that I am I have a new strategy when price action starts getting in a tight range like this. Instead of just closing my position for a small loss I’ve adjusted my TP to break even. and that has worked out for me 2 different times. And after the jobless claims coming out stronger than expected I’m glad I did as the short never really materialized. Yet another lesson learned, patience pays off, better to wait to break even than to have to loose anything.
Is Monday the right time for Rock & Roll?
I plan to go long base on the daily chart of USDCAD which move up & convergence with MFI. However, US debt ceiling deadline around the corner.
Should I go long?
So did you go long? That looked like a great setup! I’m thinking it might encounter resistance at .9700 though. There’s a falling trend line and support turned resistance in that area. Where’s your target?
No, I didn’t go long.
I skip this trade due to US debt talk two day ago.
Right strategy but too many worries.
Yeah, that was my worry too. Seems that US debt downgrade and possibility of another recession are still bullish for USD. Weird. Guess that’s how the cookie crumbles.
Any trade ideas for this week?
I was watching this Pair for a rejection of the 0.9900 level on the Daily, but obviously Price just smashed through that. I am now looking for a rejection of parity, which is a more likely scenario. If the Daily closes as a high test out of parity then I will look for a Short Entry, but obviously way too early in the day to see how likely that is - Price is stuck at parity right now, but I won’t be looking for an Entry until this evening so in the meantime will just watch it from the sidelines.
I don’t have trade this week.
I’m keep an eye on Aussie for reversal. I don’t expect this will happen soon.
Short at parity would’ve been awesome! Problem is, I was already long AUD/USD at parity and I didn’t want to double my exposure to anti-USD trades. Plus, there was that FOMC statement too.
Planning to short at a retracement?
Interesting. What’s your bias though? I’m getting somewhat confused with the sudden changes in risk sentiment! Do you think it’ll be pro-USD or anti-USD for the rest of the week?