USD/CAD Forex Signal - 1 May 2018

Yesterday’s signals produced a long trade from the bullish bounce at the support level of 1.2814. The outcome of this trade still seems very uncertain, so it may be wise to exit in profit before the major news releases due later.

Today’s USD/CAD Signals

Risk 0.75% per trade.

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

Long Trade

  • Go long after the next bullish price action rejection following the next touch of 1.2750.

  • 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.

  • 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 Trade

  • Go short after the next bearish price action rejection following the next touch of 1.2946.

  • 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.

  • Remove 50% of the position as profit when the trade is 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 was uncertain about price direction yesterday and that seems to have been a correct approach. It is interesting that the support at 1.2814 has continued to hold, yet the longer the price fails to truly rise to new highs, the more longer-term charts suggest we are seeing a wider bearish turn in the price. For that reason, I think a break below 1.2814, if it holds, will be significant for this pair. Although we are seeing a strong U.S. Dollar, if there is geopolitical disruption in the Gulf region over the coming weeks, we are likely to see the price of Crude Oil rise strongly, which should give the Canadian Dollar a boost. USDCAD

As for today’s outlook, there are important data items for both currencies, so price movement is unpredictable.Concerning the CAD, there will be a release of GDP data at 1:30am London time. Regarding the USD, there will be a release of ISM Manufacturing PMI data at 3pm.

Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.