The DXY had moved down for three straight days this week, so it was not surprising to see retracement trades set up today. After some some disappointing Canadian news and very positive U.S. economic news, a long USDCAD trade was taken risking 13 pips for a potential 38 pips to our daily target at 1.2552.
The pair had found a bottom and was moving higher in advance of the U.S. session overlap. With lots of economic news pending, patience was important. After a pullback and reversal pattern, the pair was able to move up and test its Asian session high. We moved our profit stop just below this level and when the pair reached our target the trade was closed.
Tomorrow, going into the weekend, we may find this pair testing the familiar 1.2600 area – where it has struggled or with USD weakness – testing the 1.2400 area.
Good luck with your trading!
