USD/CAD Forex Signal - 15 January 2018

Last Thursday’s signals were not triggered as the price action did not produce an obvious bearish pattern, but the resistance at 1.2586 held well and quite precisely, capping a significant swing high.

Today’s USD/CAD Signals

Risk 0.50% per trade.

Trades may only be taken before 5pm New York time during the next 24 hours.

Long Trade

  • Long entry after the next bullish price action rejection following the next touch of 1.2314.

  • Put the stop loss 1 pip below the local swing low.

  • Adjust the stop loss to break even once the trade is 20 pips in profit.

  • Remove 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to ride.

Short Trades

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2475 or 1.2495.

  • Put the stop loss 1 pip above the local swing high.

  • Adjust the stop loss to break even once the trade is 20 pips in profit.

  • Remove 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to ride.

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

I wrote last Thursday that a strong break above 1.2586 would suggest a continuing upwards movement, possibly to as high as 1.2697. In fact, the price was unable to break above the area, which produced a significant swing high, so I was correct in seeing it as a pivotal area. The price has continued down from there, and is now below some obvious lower resistance levels. There is no long-term trend, and the Canadian Dollar is not prominent in the market right now, but there may be a good short trade opportunity at a retracement to at least 1.2475 as this area is also confluent with a major round number at 1.2500.USDCAD

There is nothing important due today concerning either the CAD or the USD. It is a public holiday in the U.S.A. today.

Adam is a Forex trader who has worked within financial markets for over 12 years, including 6 years with Merrill Lynch. He is certified in Fund Management and Investment Management by the U.K. Chartered Institute for Securities & Investment. Learn more from Adam in his free lessons at FX Academy.