Yesterday’s signals were not triggered, as none of the key levels were ever reached.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades may only be entered before 5pm New York time, over the next 24-hour period only.
Long Trade
Long entry after the next bullish price action rejection following the next touch of 1.3100.
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 run.
Short Trade
Short entry after the next strongly bearish price action rejection following the next touch of 1.3275.
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 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
I wrote yesterday that a bullish reversal at 1.3100 could be good for a long trade. Generally, the closer to 1.3000 a bullish reversal emerges, the better chance I think it has of being a profitable trade. I was right about this, and the price has risen very strongly after getting to within 10 pips of 1.3100. The USD is strong, and the CAD has weakened, party due to the weakness in the price of Crude Oil. The picture looks very bullish, but the price is extended and is also close to key resistance at 1.3275, so the moment may have passed. Be extremely careful in trying to take a short from 1.3275 – a break above that level would be a very bullish sign.
There is nothing important due today concerning the CAD. Regarding the USD, there will be a release of Building Permits data at 1:30pm London time, followed by testimony by the Chair of the Federal Reserve before Congress at 3pm and Crude Oil Inventories at 3:30pm London time.