Ok I deviated from my plan.
Overnite I saw the USDCAD strength and remembered how I missed a 300 pip short a while back because the USDCAD was a difficult short before, during and after the QUEBEC elections. (I covered for about 30 pip profit, thought that I was a lucky dog, and then Dennis Gartman makes the call and shorts the USDCAD which caused I believe a chain reaction short to 1300s)
You can tell I am still pissed off about that since I was calling out that short for a long time.
What does this mean?
=> I moved my stop to 1350 and added to my short at 1330 (covered this part at 1290 with a limit order, wooo +40 pips)
anyway I am still holding my last half of the original short from 1340 and now looking for a target around low 1200s (my limit order is at 1200, but that is arbitrary, if it hits then thats a bonus)
needless to say, this is what I am observing
- any relief lately is met with tremendous resistance
- the International Security Transactions in CAD - Feb number was very positive suggesting that the Canadian economy and the Canadian currency are in demand
- a housing price implosion is seemingly more and more realistic in the US (i.e. my mother is still hoping for around $1MM for her house which is nearly 30 years old, while everyone else with a similar house has reduced the price to high $800k)
=> any movement to mid 1300s, I will short and cover in the high 1200s for now while keeping my core short position
I understand that I have shorted near the temporary bottom and that a relief rally of around 150 pips is becoming more and more probable (so many contrarians), but with this daily red doji forming proceeded by strong sell interest and additionally any type of daily support breached with very weak support at 1175, we could easily see another 150 pips to the downside as well with in a week.
But be cautious ... in the next two days there are Canadian inflationary numbers as well as numbers that firugre into the Canadian GDP, I might be forced to close my short positions early!
