Yesterday’s signals produced a profitable short trade following the bearish engulfing candlestick combo rejecting the resistance level identified at 1.3282.
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 1.3165.
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 bearish price action rejection following the next touch of 1.3218, 1.3262, or 1.3282.
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 saw 1.3262 as likely to be the pivotal level: if it was not breached and Crude Oil rose again later today when the U.S. returns from holiday, I would take a bearish bias here as we might see a nice downwards movement with no support to break it until 1.3165. This was not a great call as the price continued to rise to the next resistance level at 1.3282 before rejecting it to the pip and turning very bearish and falling quite a long way.
The picture now looks more bearish as the USD continues to weaken, and we have new lower resistance at 1.3218. I would take a bearish bias if we get a retrace to that level later and a firm bearish rejection, but it looks right now that the support at 1.3165 is likely to be hit first before that happens.
There is no long-term trend so trading this pair can be difficult.
There is nothing of high importance due today regarding the CAD. Concerning the USD, there will be a release of FOMC Meeting Minutes at 7pm London time.