Yesterday’s signals were not triggered, as there was insufficiently bearish price action at any of the resistance levels which were hit.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades may only be taken between 8am London time and 5pm New York time today.
· Go long after the next bullish price action rejection following the next touch of 1.2815 or 1.2785.
· 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.
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.
I wrote yesterday as the price was making a short-term bearish turn, we were most likely to see a bearish pull back. I was wrong about this, the price in fact continued to rise strongly and broke right through three resistance levels, although it is unclear whether the final one at 1.2840 has truly been completely invalidated, so I leave it on the price chart shown below for the time being. I saw a break above 1.2840 as being a very bullish sign so I now have a very bullish bias on this pair despite the absence of a long-term trend. There is also a long way to run until the next resistance level is reached at about 1.3050, so the line of least resistance should continue to be upwards once the price can get properly clear of 1.2850.
There is nothing due today concerning the CAD. Regarding the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time, as well as testimony from the Chair of the Federal Reserve before Congress.