Last Thursday’s signals produced an excellent and very profitable short trade following the bearish pin candlestick which rejected the resistance level at 1.3367. It would probably be worth closing out the trade now for any remaining floating profit.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades must be entered before 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
Short entry after the next bearish price action rejection following the next touch of 1.3250 or 1.3284.
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 last Thursday that the picture seemed to be more bullish and it looked likely that the resistance level at 1.3367 which held yesterday was going to be the day’s pivotal level. I was wrong about expecting a bullish break, but I was very, very right about 1.3367 being the pivotal level, with the failure there producing a large, profitable downwards movement for anyone who got in on a short trade there.
There is still some bearish momentum, but it looks as if the price needs a bullish retracement first. There could be good opportunities for more possible short trades at 1.3250 (a key psychological level) or at the higher resistance level of 1.3284 – I would take a bearish bias if either of these set-ups occurred later.
There is nothing important due today regarding either the USD or the CAD.