USD/CAD trade idea

I looked at short EUR/JPY trades yesterday at ¥137.57, and given moves yesterday, the trade is 130 pips in the money at the time of writing.

Source: Bloomberg

It therefore seems prudent to bring stops closer to breakeven.

I also think it is worth looking at longs in USD/CAD given yesterday’s trend break. The various oscillators are headed higher, suggesting pullbacks will be contained. But the real test will be whether the pair can break the June high of C$1.2562.

The fact the 20-day moving average is headed perfectly sideways and the pair is above the top Bollinger band suggests a risk of short-term weakness and some modest mean reversion.

With this in mind, my preference would be to look at a small long position into C$1.2450 (spot currently at C$1.2482), while placing a stop at C$1.2285. On a closing break of C$1.2562, I feel adding to the trade would be wise and from here stops could be adjusted.

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