USD/CAD Forex Signal - 24 October 2018

Yesterday’s signals produced a profitable short trade following the bearish outside candlestick which rejected the resistance level at 1.3118. It is in profit and should be watched carefully so it doesn’t turn into a loss, it might not fall much further until unpredictable major news releases.

Today’s USD/CAD Signals

Risk 0.75% per trade.

Trades must be entered from 8am London time until 5pm New York time today only.

Short Trade

  • Go short after the next strongly bearish price action rejection following the next touch of 1.3118.
  • 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.

Long Trade

  • Go long after the next strongly bullish price action rejection following the next touch of 1.3003.
  • 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.

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 it looked as if the resistance at 1.3118 was going to be important. A failure there could trigger a stronger downwards movement, providing a short trade opportunity, while a clean break above 1.3118 would have little in the way of a further rise, giving a potential long trade opportunity. I was wary of using the support at 1.3084.yesterday that it looked as if the resistance at 1.3118 was going to be important. A failure there could trigger a stronger downwards movement, providing a short trade opportunity, while a clean break above 1.3118 would have little in the way of a further rise, giving a potential long trade opportunity. I was wary of using the support at 1.3084.

This was a very good call, correctly identifying the day’s pivotal level at 1.3118 and correctly discarding the support at 1.3084.

The price generally, technically, looks likely to fall further now, with no longer-term trend to provide direction. However, the Bank of Canada are providing their monthly input later, which is liable to cause volatility and unpredictable price movement, so I have no bias as to today’s direction at all.

USDCAD

There is nothing important due today concerning the USD. Regarding the CAD, there will be a release of the Bank of Canada’s Monetary Policy Report, Rate Statement, and Overnight Rate at 3pm London time, followed at 4:15pm by the usual press conference.

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.