EUR:CAD Swing Long; 13th December 2014

EUR:CAD Swing Long; 13th December 2014

I’m somewhat late posting details of this trade as it was entered by an electronic limit order at a time where I had no internet connection to tweet it live, although details of the trade possibility were posted on the ADVFN forum in advance.

In short, here is what attracted me to this trade, entered at 1.4260:Fundamentally:

  •  CAD tends to move with oil prices. Low oil prices generally sees weaker CAD.
  • The possibility of Draghi getting support for another 1 trillion QE is becoming less likely.

Technically:

  • The exhaustion gap at the lows – fairly common at highs/lows in FX
  • The area around the 50% fib between 2012 lows and 2014 highs supported price for 2 Months proving itself as potential support.
  • The falling wedge break-out is a bullish sign.
  • The 200 MA looks to be a viable initial upside target and achieving it would still print a lower high thus keeping the overall down trend intact whilst offering a high probability retrace point.
  • Positive MACD divergence throughout the 2 Month “bottoming/consolidation” process adds weight to at least a retrace if not a trend change.

EUR CAD Daily 12th Dec 2014

The main doubt about this trade is simply that the bottoming process looks  incomplete on the chart. As detailed above, the initial upside target is the Daily 200 MA where I may consider just closing the trade having had a run of trades that have failed to exceed their initial targets recently!

2 Comments
  • RS2OOO
    Posted at 21:42h, 14 December

    Tonight’s EUR:CAD open gapped up to my initial target at the Daily 200MA thus I’ve closed half the position at 1.4471 for a profit of 211 points.

  • RS2OOO
    Posted at 13:04h, 20 December

    The 2nd half of this position was stopped out at break-even. That was entirely unexpected and the reversal happened too quickly to react.

    Therefore an aggregate profit of 105.5 points was taken on the trade.