Forex Trade - USD/CAD

Here's what has been happening with USD/CAD:


The pair made a couple of closes below the fib lines I pointed out on the previous chart. If you stuck with the short trade it would have netted around 125 pips for a very nice profit.

USD/CAD is a "commodity currency" which means it is correlated with commodities like oil, metals, etc. We will probably continue to see commodites rise which means a continued drop in this pair. I'm looking to short 10 pips below the previous day's low with a stop above the previous day's high, and target the bottom of the channel.

In my options account, the Russel 2000 index has been going strong which brought the index dangerously close to my short Apr calls. So, I adjusted the my calls another strike higher from 770 to 780, which reduced my profit from $2.20 per contract to $.60 a contract. The index has dropped down to about 756, but I think I did the right thing in protecting my position. Also, I bought calls in IWM to hedge and so far they have made a pretty decent profit. We'll see what happens at the April expirations!