The USDCAD is not usually very active during the Asian session,but it made a large countertrend move on Tuesday. At the beginning of the U.K. session it could not close above its Asian session high and set up for a short back-to-trend. Three candles into the U.K. session a short is entered risking 15 pips for a potential 75 pips to our daily target at 1.2290.(not shown)
Sometimes in trading you can wait for what seems like hours for a trade to get moving and other times, the market delivers quickly. Today’s reversal back-to-trend was quick and vertical.
As price moved down, we locked in profit quickly… knowing that vertical moves are not sustainable and looked for any sign of reversal. Price slowed at its Asian low and retested the level. We tightened our profit stop even more after 2 long lower wick candles, and it was hit.
Tonight President Trump makes his “State of the Union” address and we expect to hear “America First” and “fair and reciprocal” trade at least once. This however may not boost the USD as one might expect from protectionist rhetoric.
Hopefully on Wednesday the FED will be able to steer the USD into a more positive territory based on the fundamentals.
I’m back after missing a lot of last week due to the flu.
Good luck with your trading!
