USD bears getting a better say - short USDCAD
Updated
Trade Parameters - After climbing to a three-month high on Wednesday, the rally in USDCAD fizzled on the back of broad USD weakness and various key Fed members acknowledging the shift in US and global economic outlook. We are looking to short USDCAD at the current level of 1.3147 with an initial profit target at 1.3078 –this being the 32.8% Fib. level of the last major range. Target two is 50% Fib. level of the last major range at 1.3019.We would look to exit the trade should price close above the five-day exponential moving average currently at 1.3189.
Fundamentals - In this week’s US data flow,we get to further assess the likelihood for future interest rate hikes in the US. There has been a clear change of expectations, and as such, we could see the bears get a firmer hand in the USD. Furthermore, this view will be put to the test at the end of this week, with the release of Canadian CPI and retail sales. Good numbers would confirm the bottom and potentially take the pair down to 1.30.
This trade setup is definitely not for the faint hearted, especially with US crude having had such a big move of late. So, the trade needs more work and as such position sizing should be kept to a minimum. However, we are seeing technical signs that traders are better buyers of US rates and the belly of the US fixed income curve and given the concentration of USD positioning we could see further broad USD weakness.
Disclaimer.
Trading leveraged products carries a high level of risk and may result in you losing substantially more than your initial investment. Pepperstone Group Limited is licensed and regulated by the Australian Securities and Investments Commission (AFSL 414530). Pepperstone Limited is authorised and regulated by the United Kingdom Financial Conduct Authority (FRN 684312). This information not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Fundamentals - In this week’s US data flow,we get to further assess the likelihood for future interest rate hikes in the US. There has been a clear change of expectations, and as such, we could see the bears get a firmer hand in the USD. Furthermore, this view will be put to the test at the end of this week, with the release of Canadian CPI and retail sales. Good numbers would confirm the bottom and potentially take the pair down to 1.30.
This trade setup is definitely not for the faint hearted, especially with US crude having had such a big move of late. So, the trade needs more work and as such position sizing should be kept to a minimum. However, we are seeing technical signs that traders are better buyers of US rates and the belly of the US fixed income curve and given the concentration of USD positioning we could see further broad USD weakness.
Disclaimer.
Trading leveraged products carries a high level of risk and may result in you losing substantially more than your initial investment. Pepperstone Group Limited is licensed and regulated by the Australian Securities and Investments Commission (AFSL 414530). Pepperstone Limited is authorised and regulated by the United Kingdom Financial Conduct Authority (FRN 684312). This information not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Trade closed: stop reached
We got stopped out on this trade.
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