Yesterday’s signals were not triggered, as there was no bearish price action at 1.3402.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades may only be taken between 8am London time and 5pm New York time today.
Long Trade
- Long entry after the next bullish price action rejection following the next touch of 1.3402.
- 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 1.3470 or 1.3529.
- 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 despite the recent bullish move, the overall technical picture remained the same, and I would still be looking for a short trade after a heathy bearish reversal at 1.3400, especially if 1.3402, the round number, and the trend line slightly below that were all rejected at the same time.
This did not happen, with the USD generally rising across the board yesterday, and the price broke strongly above that resistant area around 1.3400 instead of reversing there. This is a bullish sign and the price is now close to significant new high prices but needs to break above 1.3470 or even 1.3500 or 1.3529 to become really bullish. It is still a little early to enter any long momentum trades until we clear this are which has been a significant top for several weeks. We do have crucial releases from the Bank of Canada which might either give the price that extra bullish bus or send the price back down into its comfort zone. Either way, we are likely to see relatively high volatility during today’s New York session.
There is nothing important due today concerning the USD. Regarding the CAD, the Bank of Canada will be releasing its Monetary Policy Report, Rate Statement, and Overnight Rate at 3pm London time.