[B]USD/CAD Daily[/B]
[B]Long or Short:[/B] Long
[B]Entry Point:[/B] .9780
[B]Stop Loss:[/B] .9680
[B]Profit Target/s:[/B] .9980
[B]Reward-to-risk Ratio:[/B] 3:1
[B]Risk percentage:[/B] I’ll risk 1% on my first position at .9780 then, if the price goes my way, I’ll add another position at .9880. I’ll risk another 1% on this one but I’ll move the stop from my initial position to .9780 when I add.
[B]Indicators used:[/B] RSI (14)
[B]Trade Rationale:[/B] There’s an inverse head and shoulders pattern on the daily chart and I’m waiting to go long if the neckline (.9700 area) breaks. There’s also a downward trend line on that time frame so I set my long order above the trend line in case it breaks.
CME just increased margin requirements for crude oil so this could still be a drag on oil prices and the Canadian dollar.
Canada won’t be releasing any big reports during the first few days of the week but risk aversion from the recent weak reports from several major economies could spur US dollar buying. Then, if the Canadian CPI and retail sales report due Friday come in below expectations, it could push USD/CAD back to parity.
[B]Trade Adjustments:[/B] If my trade doesn’t get triggered, stopped out, or closed at .9980 before the end of the week, I’ll manually close my open orders/trade on Friday. If the Canadian CPI and retail sales beat expectations then, I’ll close my open orders/trade manually also.