****I was looking at this nice Daily signal and wanting to get in after the Employment data from Canada later on, but update news from OPEC to indicate they have met 90% of their output curb from 80%.
This is another significant positive sentiment for CAD, alone with the already positive Chinese Trade Balance, we have decided to jump in this trade with the existing entry for Daily Management.
We cut our risk capital in half because we still have a USD/JPY pending trade as well and want to control our overall JPY position to no more than 1%.
- CAD has been performed very well fundamentally, with the positive GDP last week and good employment datas previously. Moreover, the Oil market continue to support CAD as the strength from OPEC is still strong to push the price upside, meanwhile, we also had a good Chinese Trade Balance today to push the oil demand and global sentiment higher. We have a very nice double bottom in CAD/JPY with a strong bullish candlestick, everything works out well and the only risk is the upcoming employment data in NY sessions later on. However, the unemployment datas are expected to be negative this time, but the macro picture of the oil market continues to support CAD and we think in the long run, CAD is still a favourable currency to the upside. Although the miss data from employment today will pressure this trade, but we think it might be able to hold it. We took the trade for now bearing the risk of the upset employment datas because of the fresh new datas from OPEC.
- The catalyst was the global sentiment, the positive China Trade Balance and the announcement of OPEC meeting their capacity in 90% from 80%. It does show a strong commitment from OPEC to cut the oil, and as mentioned a lot of large money are slowly getting into the oil market for upside movement as well.
- We’re in a nice support zone riding the existing uptrend.
- The bias or the first risk is the employment datas that are about to release. As mentioned, we usually don’t take Daily Trade ahead of any major event, but because of the announcement from OPEC which is another major event to support CAD, we think this will offset the possibility of upset employment data later on if the data is indeed a negative surprise. Moreover, we might be able to set to BE before the datas if possible and get in again at lower level. The fact is that from Macro perspective we think this trade might work out well.
- I’ll manage it with a fundamental perspective and i also used a large stop loss so any breakdown will be a significant sign that i’m wrong.
- Yes i jumped in
LONG @ 86.40
SL @ 84.64
P @ 88.16
****updated Feb 10th 8:40am****
the Canadian Employment result was a large deviation positively for Canada, not only the employment change beats the expected number (but still lower than previous), the unemployment rate also drop 0.1% while the participation rate increased 0.1%.
These datas have shown a strong labour market for Canada, alone with the previous positive GDP last week and the stable inflation, with the macro force of strong oil market, CAD has now become the strongest currency fundamentally to buy.
****updated after the Press conference of Trump and Abe****
as expected, there weren’t too much updates and the general tone was quiet friendly.
According to the geopolitical location of Japan and U.S, the past history since world war 2, and the current necessity for U.S alliance in the Pacific ocean, i really doubt there will any disagreements that are large enough to tera up the relationship.
On the contrary, I think the weekend meeting will most likely be a gateway and show-off for U.S.
Nevertheless, because we never know what’s about to happen, so we’re still holding this trade based on the strength into CAD and the oil market for swing trade in a longer term.
If the fundamental shifts, such as OPEC members show their withdrawal to the agreement, or a sudden hostility toward Canada from U.S in terms of NAFTA, then that will get me worry.
Otherwise, I think this trade can still go to the upside so i’m most likely will hold it over the weekend as i don’t have any reason to exit now.
****updated Feb 13th 2am****
We had United Arab Emirates Energy Minister commented that OPEC Jan level of commitment is high and they are expecting to see more commitments in months to come. This is another positive sentiment for oil market and CAD.
Meanwhile, the general risk sentiment is also on for now to help all commodity pairs. Japan just released a miss on GDP data which also helped this trade.
The biggest risk will for CAD/JPY now will be any global risk off event to support JPY which we saw North Korean launched missile again during the weekend, although not much global reactions but this kind of event might become market shaker.
Another risk event to directly affect CAD/JPY will be the meeting between Trump and Trudeau today which might effect CAD in either ways depends on the outcome.
****Feb 14th 2am****
Today the meeting between Trump & Trudeau had been great especially for Canada. The sentiment is much friendly than expected and NAFTA is going to be “tweaked” instead of “chopped”.
This alone with the positive datas of OPEC compliance and positive fundamental datas of Canada have provided great strength for CAD.
Therefore, we will continue to hold this trade.
The risk now will be any global panic incident to drive up Yen, or any negative news from oil market to drive down CAD.
****updated Feb 14th 7pm****
The risk on sentiment today continued to help CAD over Yen and we went higher with consecutive 4th day of green candle.
Note that technically we’re approaching our first resistance at $88 and should expect some pullback.
Fundamentally there is still more to go for CAD and tomorrow’s Manufacturing sales m/m can either be a boost or drag.
We will still let this trade run because the fundamental bias is very strong in this pair and we don’t have any reason to exit or move SL for now.
****updated Feb 20th 3am****
CAD is still a very attractive currency both fundamentally and sentimentally, the pullback from oil market had pressured CAD but it’s short-lived as the general direction for oil is still looking to the upside.
Again, the biggest risk is the global uncertainty to fuel up the safe heave JPY but as we still don’t have any fundamental changes to get out of this trade, we will keep holding it for now.
****updated Feb 20th 9pm****
CAD/JPY is in a good picture as the 3 days of retracement did not really penetrate to the downside significantly, fundamentally still a lot of bias toward CAD over JPY and we’re still holding this trade.
****updated Feb 22nd 1am****
CAD/JPY continues its uptrend with a clear fundamental bias for CAD. We think it will reach 88.50 - 89 in the near future and we’re holding this trade as long as the fundamental is still in our side.
****updated Feb 23rd 7pm****
CAD had a nice help today from the oil market and less than expected built from U.S Crude Oil Inventories. However, the U.S Crude oil is still in a 7th week built and not a good long-term strength for the oil market.
On top of that, Canada also released a negative retail sales figures recently.
Although the fundamental bias is still strong in this trade, but any more safe heaven inflow might cause this pair to go downside even more to stop us out.
On the other hand, I do like to add position to CAD/CHF because CHF is notably more weak than JPY and the fundamental bias is still favouring CAD in long-term perspective.
Our SL will be below 200 EMA and upside target is reachable as well.
sl @ 0.7525
p @ 0.7767
****updated Feb 24th 5pm****
unfortunately our CAD/CHF did not get filled with 5 pips away and now it’s looking quiet nice to the upside.
If we hit our target before we get filled then the trade is no longer valid, i’m going to cancel the pending order after that.
CAD/JPY on the other hand did not perform as good as CAD/CHF due to the strength into Japanese Yen. However, the CPI datas today from Canada were very positive and that had given us more fundamental bias to hold the trade.
Now we have positive GDP, Employments & CPI - that is all we need for a strong currency.
Meanwhile, the oil market is still resilient to the upside.
The biggest risk if Japanese Yen itself as the safe heaven inflow is very large nowadays.
****updated Feb 28th 9pm****
We had a large drop in CAD cross the board today due to oil market weakness and lots of shorts price in CAD prior to tomorrow’s BOC rate decisions.
Unfortunate our CAD/JPY got stopped out and our CAD/CHF got filled but suffered huge drawdown now with 2 times of the average daily range. The move was again caused by panic movement into safe heaven currencies, oil market weakness and price in for BOC rate decision for tomorrow.
Fundamentally CAD is still very solid but as mentioned, the sentimental whipsaw can always be large and persistent to stop us out. That’s the game of trading.
****updated March 2nd 7pm****
CAD/CHF barely survived and now the 200 EMA is our last support.
Honestly if i’m flat now, i will looking to buy at this level as this is a much attractive area.
Again, this trade was managed poorly by myself as I was buying at a relatively high level, although it was a good support zone and i was looking to set SL to BE when we reach 0.7765 previous high which we never touched again.