Quick update on the USD/CAD short I posted last week. While the trade is in the money now, I’m less convinced the fundamental picture will push the Dollar lower. High inflation numbers have driven the Fed to make it clear controlling inflation is their higher priority now but will they raise interest rates ahead of schedule? Perhaps, perhaps not. We are at the bottom of a daily chart bull flag formation and I’ve opted to play it safe and protect the position with a break even stop. We may break below and continue where on the origional plan but when the fundamental picture swings in a new direction, you have to adjust.

Best of luck,

Ryan

I’ve decided to get short USD/CAD tonight for the following reasons:

1. Bank of Canada held rates at 3% rather than cut to 2.75%, with hawkish tones surprising the market today. The easing cuts appear to be over with for now.
2. Technically speaking the daily chart printed a huge reversal candle against well established resistance today.
3. Institutional positions are still net short the pair.
4. Interest rate carry is in my favor on a short.
5. Oil, Oil, Oil, Oil oh yeah.. and Oil….(not the biggest factor, but it helps)

I’m short at $1.0226.

Best of luck,

Ryan