USDCAD—grinding lower

I haven't blogged about this pair since this past Friday when I had a short position from 1.0310. That position profit-stopped out at +20 pips and I haven't traded it this week as it hasn't looked particularly exciting. It dropped to a low of 1.0217 overnight, only 9 pips above the 1.0208 low it reached in October.

The calls now are for it to reach parity with more than one Canadian economist huffing and puffing in the popular press about the loonie's strength. Well, Canada does have some real assets—how do you spell oil?—and the loonie has been appreciating strongly against the USD and the Euro recently. So am I ready to take another short? Not at the moment. I want to see it go below the 1.0208 mark. At that time, I'll probably short a bounce. There's a real struggle at this point between buyers and sellers and it basically has USDCAD caught between 1.0217 and 1.03. We should see some action soon.

Here's the daily chart:




















© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.

My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.