Yesterday’s signals were not triggered, as there was no bearish price action at 1.3150.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades may only be entered before 5pm New York time today.
Long Trade
Long entry after the next bullish price action rejection following the next touch of 1.3055.
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 bearish price action rejection following the next touch of 1.3206, 1.3242 or 1.3262.
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 yesterday that the picture now had become considerably more bearish with the Canadian Dollar quite strong, and the price not far from multi-month lows. I was ready take a bearish bias if the price retraced to 1.3150 and made a strong bearish rejection and then broke quickly below 1.3125. Luckily this did not happen, with the price instead making a major swing reversal which was caused by President Trump tweeting that he requested OPEC to stop the price of Crude Oil rising any higher. This impacted the CAD quite hard due to its Oil exporting status and the price is now testing the top of the medium-term bearish channel shown in the price chart below. It is hard to say what will happen next but there is likely to be volatility and action though the movement looks unpredictable. The best approach to trade this pair will probably be to just follow the short-term momentum.
A break above 1.3242 would be a bullish sign, but there is no long-term trend in this pair to exploit so I take no directional bias.
There is nothing of high importance due today concerning the CAD. Regarding the USD, there will be a release of CB Consumer Confidence data at 3pm London time as well as testimony before the Senate from the Chair of the Federal Reserve.