Yesterday afternoon I issued a buy recommendation for the USD/CAD as we moved into the late U.S. session. The trade has performed well, racking up 50+ pips profit from the 1.2120 entry during today’s session.

USD/CAD Daily Chart

There are a few aspects of this trade that give me viable reasons to exit and grab the profits while they are available:

• Earlier in the session, the USD/CAD traded under Monday’s low, effectively breaking symmetry. This suggests possible prolonged consolidation.

• The upcoming API crude oil inventory release is likely to spike participation in this market. That can be either good or bad. Today’s crude trade has been tight. I look for the API to move the market considerably.

• Initially, this was a position trade. Given the lack of symmetry, and pending economic data releases, it may be a good idea to take the money and run!

Bottom Line: I am not a big fan of exiting trades prematurely, but in this case it is warranted. As my colleague Skerdian outlined in an earlier brief, the USD/CAD is showing signs of being overbought. In fact, there is an upcoming trading signal prompting a short position in the USD/CAD.

Counter-trend trades are tricky. Aggressive risk management is necessary to be a consistent winner when trading against the grain. So, if you are open in this trade, taking profits now is a good move. If nothing else, move your stop to breakeven.

It is as the old saying goes: No one ever went broke taking profits!