The Loonie Retreats Further From Most Recent High Ahead of GDP & OPEC Meeting

The US dollar lost some more ground yesterday after reaching a most recent high of 1.3588 two weeks ago. Price reached a day high of 1.3536 to close the London session at 1.3411, a drop of 1.1%.

Bullish bets on the Greenback receded somewhat yesterday across all major currencies, and the Loonie got some reprieve also. It would seem that that the Bull trend for the US dollar is still intact, this may be some profit taking and price consolidation as the market reaches levels not seen since March.

Tomorrow throughout the day OPEC countries will be meeting to discuss an agreement on oil production reductions. A lot of bets have been placed on the organization coming to a final accord; a lot will depend on the size of the reduction expected between 500k and 1 million barrels per day.

Crude oil price, as well as other commodities, affects the price of the Canadian dollar; as higher Crude prices compensate Canadian producers when theUS dollar weakens. We can expect a volatile day tomorrow as information about the meeting leaks through to the press.

We will also be getting the Canadian GDP for Monthly and Quarterly data. Forecasts for the quarterly data are for a sharp increase of 3.4%, compared to last month’s figure of -1.6%. Anything short of that number could see the Loonie lose ground again.

If you think the USD/CAD may continue to decline in price after the GDP data release all you need to do is sell USDCAD with Deal Cancellation protection. This feature allows you to take a position and set-up a maximum stop loss, which if hit during the first hour, will simply cost you the premium you paid to buy Deal Cancellation protection.

Deal Cancellationgives you the option to close a trade, during 1 hour, losing no more than premium you paid, while allowing you to profit from any positive price movement. The screenshot below shows that to sell $35,000 with a stop loss of €246.21 would cost €15.51 in Deal Cancellation protection.

If price decreases from 1.3414 you will be able to close your trade for a profit, less the cost of Deal Cancellation. Let’s say price goes down to 1.3324 than your profit would be €221.59 - €15.51 = €206.08, while the maximum risk for one hour would be €15.51.