Yesterday’s signals were not triggered, as there was no bearish price action at 1.3235.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades must be entered from 8am London time to 5pm New York time today only.
Short Trade
- Short entry after the next bearish price action rejection following the next touch of 1.3383.
- Place 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 trade is 20 pips in profit and leave the remainder of the position to ride.
Long Trade
- Long entry after the next bullish price action rejection following the next touch of 1.3055.
- Place 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 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 wrote yesterday that I would take a bearish bias if we got a couple of hourly closes below yesterday’s low at 1.3160, or if there was a retracement and strong bearish reversals at either of the resistance levels above. I thought that this bearish breakdown from the price channel seemed solid and likely to run further. As it happened, the 1.3160 level held, and the price turned around and moved up quite strongly without making any bearish reversals at key levels. The call was good technically, as the conditions I set kept out of a bad losing short trade.
It looks likely that the former resistance at 1.3235 will become support. However, action today is very unpredictable, as the Bank of Canada will be bringing their major monthly input later today, which might drive the price anywhere. Therefore, I have no directional bias on this pair today.
There is nothing important due today concerning the USD. Regarding the CAD, there will be a release of the Bank of Canada’s Rate Statement and Overnight Rate at 3pm London time.