Reducing exposure in CAD – FXStreet Signals
|The portfolio is now net-long exposed to CAD, derived from the 4 open trades involving this currency all long the Canadian dollar: 2 short trades in AUDCAD (sell-AUD/buy-CAD), 1 short GBPCAD (sell-GBP/buy-CAD), and 1 long CADCHF (buy-CAD/sell-CHF). But cracks are appearing in the bullish case for the CAD when analyzed in its indexed form. The currency has been coiling in recent days beneath its June peak, unable to reach that watermark. If broken, yesterdays low would open the gates for the mid-range of the summer trading.
Oil has been a key standout in an otherwise dull market so far this week, adhering to its multi-week lows. This price action could start to weigh on CAD’s fun as well. A break out of the CAD's triangular congestion could be taken as a tell-tale sign for us to force closure on the CADCHF.
At this stage, we needed to offload some CAD longs. But since GBP is weaker than CAD on a relative basis, we can still ride on the profits of the GBPCAD short (Id: 49818320). Against the AUD, which is about to take out the support line connecting the sequence of higher lows in past weeks, is also a bearish signature for this currency. Therefore the CADCHF long (ID: 50294911) was the better choice to reduce CAD risk for now.
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