USDCAD Fake Breakout And Euro Catches A Bid On A Rumor

Tuesday’s trading session was as exciting as the volatile FX markets can be.

The Euro caught a bid on a rumor reported through Bloomberg that the ECB is said to see June 14 as a live meeting to debate the QE exit. I was fully loaded trading USDCAD but couldn’t miss this bite even though my mouth was full. EURUSD traded up to 1.172os and I was able to profit from 23 pips on this trade. I cannot be sure this means anything – I have gotten used to these rumors from Bloomberg or Reuters concerning the ECB and usually, they amount to nothing. But as Soros said (I think), invest first and investigate later. The flow is your friend and my friend showed buying.

For June 6, I expect follow through with 1.1750 and maybe 1.1780 tested…

Talking about flow and buying. USDCAD was totally a crazy trade (or a couple of trades). Waking up in the morning, it was bid from 1.2920 to 1.2960 and as NY came in, it stayed bid. Then came the Kudlow story where he suggested Trump is thinking to screw the NAFTA threesome and let’s cuddle in couples. USDCAD caught a strong bid to 1.3067. It looked like it was going back to 1.31. There was no reason not to. But the market thought overwise in a weird reversal if you ask me. It was the mother of all fake breakouts. Later in the day, the Canadian response was they still wanted a trilateral deal…go figure.

In any case, I took profits into 1.3050 and then when it reversed, I closed out at 1.3042. I took a short at 1.3022 and rode it back to 1.2977.

At the moment, I am flat and undecided where this is heading. It has been bought on dips in previous sessions but this false breakout might be an omen. I expect a retest and break of 1.30 and a move to 1.31. Let’s see but as the Pivot  (1.2983) shows, we are 40 pips away from it on the daily and the pair has been offered all afternoon. So I reckon we see 1.2890 first. Then our friends at ForexLive published this, so downside bias is strengthened for tonight.

 

 

Good luck trading in the Asian and European sessions and see you in the NY session.