USD/CAD Forex Signal - 7 January 2019

Last Thursday’s signals were not triggered, as there was no bullish price action when either of the support levels were reached.

Today’s USD/CAD Signals

Risk 0.75% per trade.

Trades may only be entered between 8am London time and 5pm New York time today.

Long Trades

  • Long entry after the next bullish price action rejection following the next touch of 1.3324, 1.3261, or 1.3214.

  • Put the stop loss 1 pip below the local swing low.

  • Move 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 Trades

  • Short entry after the next bullish price action rejection following the next touch of 1.3422 or 1.3470.

  • Put the stop loss 1 pip above the local swing high.

  • Move 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 last Thursday that until the price broke below the lower support level at 1.3529, it would be wise not to become bearish to any extent on this pair. I was looking to be bullish at a bounce at support but using 1.3529 was a good call as the price fell very sharply from that area. This is mostly due not so much to the recent weakness we have seen in the U.S. Dollar, but to the recovery in risk sentiment driven by a more dovish Federal Reserve which has helped boost the price of Crude Oil quite strongly, which has in turn boosted the Canadian Dollar. There has also been some profit-taking by bulls as the bullish trend collapses which has helped drive the price down too.

It looks as if the price may still fall further, but perhaps not by much. I would take a bearish bias after a pull back to a resistance level followed by a bearish reversal.USDCADThere is nothing of high importance due today concerning the CAD. Regarding the USD, there will be a release of ISM Non-Manufacturing PMI data at 3pm London time.

Adam is a Forex trader who has worked within financial markets for over 12 years, including 6 years with Merrill Lynch. He is certified in Fund Management and Investment Management by the U.K. Chartered Institute for Securities & Investment. Learn more from Adam in his free lessons at FX Academy.