Yesterday’s signals were not triggered, as there was no bullish price action at 1.3214.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades must be entered between 8am London time and 5pm New York time today only.
Long Trade
Go long 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.
Short Trades
Go short after the next bullish price action rejection following the next touch of 1.3261 or 1.3324.
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.
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 weakly bearish bias on this pair, but as we had central bank input from the Bank of Canada due later as well as an FOMC release so predicting the day’s most probable movement was impossible. The best that could be said technically was that if the nearest support level is broken, the price could fall significantly further before reaching any more support.
As it happened, the price did fall further and break the nearby support, invalidating that level, but it did not fall much further. The Bank of Canada gave its monthly guidance, but it was broadly seen as vague and mixed, so the market was not pushed in any definite direction. The price is consolidating over the short-term, so there is no directional momentum at the time of writing. If Crude Oil resumes its recovery, we should see a further move down later. There is room for the price to fall all the way to the 1.3050 area. I would take a bearish bias if the price trades below 1.3180 for a couple of hours later today.
There is nothing of high importance due today concerning the CAD. Regarding the USD, the Chair of the Federal Reserve will be giving a minor speech at 5pm London time.