Last Thursday’s signals produced both a profitable long trade from the bullish rejection of 1.3159 and a profitable short trade from the bearish rejection of 1.3204, although both gave little more than the minimum 20 pips of profit.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades may only be entered until 5pm New York time Monday.
Long Trades
Go long after the next bullish price action rejection following the next touch of 1.3241 or 1.3204.
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 1.3332 or 1.3367.
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 there was still something of a bearish trend with the price held down by a bearish trend line, but it was no longer a channel and there was a double bottom at about 1.3120. The resistance at 1.3204 was looking attractive as we had there a confluence of a flipped horizontal level, the surviving bearish trend line, and the round number at 1.3200 – I was ready to take a bearish bias if we get a bearish rejection there later.
This was a good call, and the levels were correct, but the next day the price shot up and made a very strong bullish move which changes the technical situation. This move has faltered at the round number of 1.3300 and looks to be beginning a bearish retracement. I think it would be worth taking a bullish bias if we see a firm bullish reversal at about 1.3241 after New York opens, as although there is no long-term trend in this currency pair, there may be some residual bullish momentum left from last Friday’s strong directional move.
There is nothing of high importance due today concerning either the CAD or the USD.