Yesterday’s signals were not triggered, as the resistance level at 1.3671 was not quite reached before its influence was felt, driving the price down.
Today’s USD/CAD Signals
Risk 0.50% per trade.
Trades must be entered before 5pm New York time today only.
Long Trade 1
- Go long after the next bullish price action rejection following a first touch of 1.3588 or 1.3521.
- Place the stop loss 1 pip below the local swing low.
- Move the stop loss to break even once the trade is 20 pips in profit.
- Take off 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to run.
Short Trades
- Go short after the next bearish price action rejection following a first touch of 1.3671 or 1.3746.
- Place the stop loss 1 pip above the local swing high.
- Move the stop loss to break even once the trade is 20 pips in profit.
- Take off 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to run.
The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.
USD/CAD Analysis
There is a long-term bullish trend, but the medium-term trend is bearish, with the price pulling back to the broken bullish trend line but rejecting it bearishly from the other side, in a classic trend reversal pattern. The key levels in the chart below all look convincing. The driver behind this pair is crude oil, which continues to rise due to anticipated supply restrictions from major producers. Once that sentiment begins to work its way out of the market, the price is quite likely to bottom out.
There is nothing scheduled today concerning the CAD. Regarding the USD, there will be a release of Building Permits data at 1:30pm London time.