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Clive Lambert - FuturesTechs
Clive Lambert of FuturesTechs explains why he is selling AUDUSD. 0.7455 and 0.7470 are Lambert’s early candidates for a sell order, working a stop above yesterday’s 0.7518 high.
Day trade
Trade view / 28 July 2016 at 10:49 GMT

Soaring loonie may be headed back to earth

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

USDCAD rallied throughout July in a one-way ride that finally hit a wall at 1.3244, the same wall that contained all previous rallies since April. 

The sigh of relief that was heard around the world when the Federal Open Market Committee delivered another cautious statement has injected a short-term cure for risk aversion symptoms that drove USDCAD below intraday support at 1.3160. 

The US data due in the next few days may have little impact as the release comes too close to the July 27 FOMC meeting, depriving USDCAD bulls of additional support.

The intraday technicals are bearish. The break below 1.3190 snapped an uptrend that been intact since July 15 and now warns of further weakness ahead. The subsequent decline below 1.3160 just above the 38.2% Fibonacci retracement level of the July 1.2860-1.3244 range which is at 1.3096. 

A break of this level will extend losses to 1.3010, the 61.8% Fibonacci retracement level.

It is not too much of a stretch to expect additional USDCAD weakness on the approach to the weekend. Bullish USDCAD sentiment has dissipated with the less-than-hawkish FOMC statement.  

USDCAD bulls may look to reduce positions ahead of the long weekend in Canada and on the risk of additional USDCAD selling for month-end portfolio rebalancing flows.

Management and risk description 

This is a very risky trade. The expected follow-through selling below support at 1.3090 could just be a hallucination. That level could actually be the launchpad for further gains.

The anticipated USDCAD selling for month-end portfolio rebalancing may not be accurate or the size of the flows may not be large enough to be material.

OIl prices could fall below $41.00/b which would likely trigger the stop loss.

Parameters

Entry: sell ½ USDCAD at market (currently 1.3170), balance at 1.3210.

Stop: 1.3225.

Target: 1.3065.

Time horizon: close by 1600 GMT Friday.

USDCAD 30 minute with stop loss level shown:
usdcad
Source: Saxo Bank 

USDCAD one-hour with Fibonacci levels:
usdcad
Source: Saxo Bank 

USDCAD five-year daily with moving averages:
usdcad

Create your own charts with SaxoTraderGO click here to learn more

Source: Saxo Bank

— Edited by Michael McKenna

For more on forex click here.

Non-independent investment research disclaimer applies. Read more
29 July
Michael O'Neill Michael O'Neill
TRADE UPDATE: The drop in oil prices has really degraded this trade, Cancel the second sell order at 1.3210 and lower the stop loss to 1.3205.

Close the trade by 1600 GMT
29 July
assi assi
but you still looking for your target 1.3065....? we have GDP news in afew moments
29 July
Michael O'Neill Michael O'Neill
Sorry assi: I was tied up. No, I don't think we will see 1.3065 today at all. I am hoping for USDCAD selling around the 1600 GMT fix to drive it down to 1.3130 or lower so I can square up..

I think you should lower your stop to break even. The intraday downtrend is intact but it is hard to see USDCAD losing a whole bunch while oil is where it is.
29 July
Michael O'Neill Michael O'Neill
UPDATE: close the trade now (1.3125) and bank a .0050 point gain
29 July
Michael O'Neill Michael O'Neill
oops poor math-a .0045 point gain
29 July
Estuardorlemus Estuardorlemus
Thanks Mike , as you say, no one goes broke taking profits.
29 July
Michael O'Neill Michael O'Neill
Wow, what a Chump I am. Oh well, it isn't the first time...
29 July
fxtime fxtime
Just got back and see I was incredibly lucky with the Loon !!
29 July
fxtime fxtime
Just checked all my trade accts...it seems the algo trades failed on one trade but recovered on the bounce and then caught the drop !
29 July
fxtime fxtime
Its a profit Mike....at least you finish the week with a positive gain and that is the major factor for us all.
29 July
Michael O'Neill Michael O'Neill
fx time: my first trade failed. I didn't do the second and was caught looking when it tanked. All in all I had the down move perfect except no scalp position. arrrg!
29 July
fxtime fxtime
Aaaargh...you had the call spot on for this yesterday too !! Bad luck mate :-(
02 August
fxtime fxtime
Did you do the 1.3061? It is just to say 24hrs trade period !! :-)
02 August
Michael O'Neill Michael O'Neill
I did, but I was looking at this mornings setup. Is the 24 hr setup still a 5 pointer?
02 August
fxtime fxtime
As an absolute minimum yes....usually I go for 8 but lickilly got a bad fill in my order and ended up with +10 !!
02 August
fxtime fxtime
oops a fat finger typo error...luckilly I got a bad fill ..LOL. Presume you traded the two close prices too ?

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