Video

Ian Coleman - First 4 Trading
Ian Coleman of First4Trading.net explains in a technical analysis of charts why he is trading EURCAD. Coleman is looking to sell EURCAD at 1.4370 with a stop at 1.4420. His targets are 1.4125 and 1.4000.
Short term
Trade view / 29 December 2015 at 12:52 GMT

EURCAD may get high(er) for New Year's Eve

FX Trade Strategist / www.Loonieviews.net
Canada
Instrument: EURCAD
Price target:
Market price:
Background

EURCAD has never looked back following the ECB action on December 3. It rallied to 1.5320 from 1.4025 and hasn’t been below 1.5020 since the FOMC meeting.  Excessive short EURUSD positioning and falling oil prices were behind the move and those factors are still in play today.

EURUSD has been grinding higher since December 23, possibly due to pre-dealing for month end portfolio rebalancing flows as thin holiday markets play havoc with liquidity. USDCAD is bid due to soft oil prices and concern that oversupply and reduced demand will continue to be key factors in the early part of 2016 as evidenced by the Christmas eve USDCAD sell-off and subsequent rally.

The intraday and short term EURCAD technicals are bullish. The minor downtrend from the December 22 peak was broken with the move back above 1.5255. The uptrend from the
beginning of December remains intact above 1.5160

There is a good possibility that the weak oil price environment combined with month-end/year end demand in a holiday thinned market will lead to a steep spike in EURCAD.

Management and risk description

This is a risky trade due to the holiday thinned markets.  EURCAD can swing wildly and trigger the stop.  It is vulnerable to a rally in oil prices.  In addition, the EURCAD has already moved significantly and this idea is really late to the party.

Trade idea parameters

Entry:  Buy ½ position of EURCAD at market (Currently 1.5275) balance at 1.5205

Stop: 1.5145

Target: 1.5450-1.5500 area

Time horizon: December, 31 2015


Chart EURCAD 30 minute with uptrend and broken downtrend shown
eurcad
Source: Saxo Bank

Chart EURCAD 4 hour with stop loss area noted
eurcad
 Source: Saxo Bank

Chart: EURCAD daily showing take profit area
eurcad
 Source: Saxo Bank

Chart: EURCAD 5 year daily with moving averages
eurcad
 Source: Saxo Bank




















— Edited by

Non-independent investment research disclaimer applies. Read more
3y
Michael O'Neill Michael O'Neill
UPDATE: Double up time. BUY EURCAD at market (currently 1.5165) and Lower stop to 1.5090. This move, as dangerous as it is, will give the trade time to work and help to avoid th intraday noise. On the downside, if it gets stopped it will leave a mark.. If the new stop gets triggered it will result in a loss of .0115 points.
3y
Michael O'Neill Michael O'Neill
UPDATE #2: This trade proved to be a sorry excuse for a Trade Idea and an ideal example of how not to trade. The first mistake was not respecting the time of year. Ignoring the high risk of a volatile swing was idiotic, to say the least. The second mistake was chasing the move as this trade was opened a very close to its most recent peak. The third and worst mistake of all was adding to the losing position. I'm sorry-I know better and I executed this won poorl;y.

The average rate of this trade is now 1.5205. If it gets back there close the trade and thank your lucky stars for dodging a bullet.
3y
Charles Asmar Charles Asmar
Good morning Michael, Thank you for your update regarding EURCAD postions. Actually, I am long at 50K@1.5277 and 70K@1.52 with target 1.5450
3y
Charles Asmar Charles Asmar
I have a short position 10K@1.51507
3y
Michael O'Neill Michael O'Neill
PHEW!!!! This trade idea didn't just dodge a bullet, it dodged a bazooka..Close the position now at 1.5190 and book a small .0015 point loss.
3y
Michael O'Neill Michael O'Neill
Getting out even (or close to it) is a huge win in a trade that was flawed to begin with.
3y
marran marran
im still in the trade and its in profit so have moved my stop loss up to near break even and will see if it goes back to yesterdays high
3y
Michael O'Neill Michael O'Neill
Good luck to you. I dodged a bullet.
3y
marran marran
stopped ot now but took a small profit
3y
Michael O'Neill Michael O'Neill
you never go broke booking profits. Good work
3y
marran marran
I still think it is predominantly bullish and may use the dip to buy again
3y
marran marran
given your loonie outlook you need to jump back into this trade!! lol
3y
Michael O'Neill Michael O'Neill
Very true. But this time I will be less impulsive
3y
marran marran
lol. I have just put a pending buy on at 1.5110 so will see how it goes
3y
marran marran
more I look at this trade, the more I think its worth getting back into in a small way
3y
Michael O'Neill Michael O'Neill
I agree. Buy EURCAD here at 1.5110, stop at 1.5070-target 1.5190. If not reached by 1600 GMT, close trade Happy New Year
3y
marran marran
Michael I think your were right to get out all along! lol have a great new year
3y
Michael O'Neill Michael O'Neill
You too.

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