USD/CAD Forex Signal - 6 February 2018

Yesterday’s signals produced an excellent, profitable long trade from the bullish engulfing candle which formed at a bounce from a retracement to the support level identified at 1.2400. It would be wise to take at least partial profit now if this has not been done already.

Today’s USD/CAD Signals

Risk 0.50% per trade.

Trades may only be taken before 5pm New York time.

Long Trade

  • Long entry after the next bullish price action rejection following the next entry into the zone between 1.2508 and 1.2486.

  • 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.

  • 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 Trade

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2586.

  • 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.

  • Take off 50% of the position as profit when the price reaches 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

Yesterday I predicted that the former support level at 1.2400 looked to have become flipped to become probable support. This was an excellent forecast. Market sentiment is giving a bullish boost to this pair, as commodities are hit hard by market selloffs, while cash flows into the U.S. Dollar as a relative safe-haven, and the Canadian Dollar is certainly a commodity currency. It is possible that the move may now have run out of steam, and the resistance level at 1.2586 was a major inflection point when last reached, so it can be expected to have an impact if the price arrives there. I have no directional bias today.USDCAD 

There is nothing important due today regarding the USD. Concerning the CAD, there will be a release of Trade Balance data at 1:30pm London time.

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.