Yesterday’s signals produced a profitable short trade from the bearish doji candlestick on the hourly chart which rejected the resistance level I identified at 1.3332.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades must be taken between 8am London time and 5pm New York time on Tuesday.
Long Trades
Long entry after the next bullish price action rejection following the next touch of 1.3300 or 1.3241.
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 1.3367 or 1.3422.
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 strong bullish move had faltered at the round number of 1.3300 and looked to be beginning a bearish retracement. I thought 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 was no long-term trend in this currency pair, there may be some residual bullish momentum left from last Friday’s strong directional move.
I was right about the momentum but wrong about the retracement, as the price essentially just continued to rise, despite being held for a few hours by the resistance level at 1.3332. The price is now trading above that level and looks bullish as it gets very close to making a new 20-day high price. If the price can remain above 1.3332 for the first couple of hours of the London session, that would be a bullish sign that the price would be likely to go on and reach the resistance at 1.3367, but I doubt it would be able to get any higher than that today.
There is nothing of high importance due today concerning either the CAD or the USD.