USD/CAD Short

I am currently in a short position here that I entered at 1.3884 which is the upper support line of the correction that is potentially forming, I would be surprised if the dollar has the power to push through the 1.4 handle right away. I feel this pair may retrace to the trend line dating back to May 2015. From here I will watch this pair closely to see how it reacts at this support. A bounce off will likely see the price return to test the 1.4 highs on December 2015. If this support breaks then we may see a further correction to 1.3 or the 200MA whichever is greater.

Fundamentally I think this pair can reach 1.42 by the end of the summer 2016 and there may be some pips to collect in both directions, it would be nice to collect an ambitious 1000-2000 pips (500 down, 500 up / 1000 down, 1000 up). The short term correction is very dependant on the oil prices rising people selling off their profits of the good year the USD has had and the recent rate hike. The long term goal is for the dollar to maintain it's fundamental strength.

Please comment back and share your ideas.

Trade ativo:

1.3888

Trade fechado: stop atingido:

closed out @ 1.3940. I put my stop too close and I think a lot of orders were filled when the market re-opened today. Lesson learnt but has cost me 50 pips. If there is a daily close below the upper trend line of the descending channel then I will re-enter the trade. Initial feelings have been to re-enter now to catch the extra pips to make up for my loss but need to stay disciplined and wait for confirmation. 2016 is about working on patience and risk management. Not a great start to the year but the key is to learn from my mistake. The original stop should have been above 1.3980 but this would have reduced my risk reward, but risk reward means nothing if you are going to get stopped every trade for being too tight.