UPDATE: FOMC unleashes the loonie bears
The original Trade Idea was based on the expectation that USDCAD would accelerate toward the 1.3300 level on the back of renewed hawkish Fed sentiment and bullish technicals. The break of resistance in the 1.3030-60 area suggested a more rapid increase to the 1.3300 level, especially as the most recent Commitment of Traders report indicated that the spec market was long Canadian dollars.
But it didn't quite work that way. USDCAD hit a wall in the 1.3180-90 area and the rally stalled.
It is still a good idea, but USDCAD may need to consolidate the recent gains before the rally can resume. In addition, if Wednesday's Energy Information Administration oil stocks report confirms Tuesday's API drawdown, then USDCAD may sink further.
Today, the stop loss was raised to 1.3120, which was triggered, resulting in no gain or loss on the trade.
Note: the final 1/3 order was not filled.
Entry: buy 1/3 position of USDCAD at market (currently 1.3140), again at 1.31, balance 1.3050.
Stop: 1.2985 offered.
Time horizon: five days.
— Edited by Robert Ryan
Non-independent investment research disclaimer applies. Read more