Loony for the Loonie

LONGER-TERM - Though the short-term trading from last week was a little rocky, the longer-term trades are shaping up and starting to look good. Interestingly enough, both longer-term plays are off recently established record lows. I am long AUDNZD 1.0514 and long EURCHF 0.9860. I really like both of these trades and will continue to look to hold over the coming months. Other trades open at the moment are shorter-term and have yet to show any decent follow through just yet. The SPX500 short is chopping around and continues to show signs of topping, while the latest attempt at a USDCAD short is showing promise but has yet to deliver.

LONNIE REBOUND - There is so much going against the Canadian Dollar at the moment, with ongoing oil declines and a more accommodative Bank of Canada policy fueling the USDCAD push to fresh multi-year highs. But for me it's hard to avoid trading these setups, even with all the pitfalls, as markets always have a way of turning around when you least suspect. I don't believe we will see any major rebound in the Canadian Dollar that alters the current trend, but at the same time, given the severely overbought USDCAD readings, the counter-trend short play is too attractive and well worth the shot. I would probably grow concerned with this latest short position if USDCAD were to establish a daily close above 1.2600. The 10-Day SMA comes in around 1.2150 and I think this is a very realistic downside target for the short position.