USD/CAD Forex Signal

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Yesterday’s signals may have produced a losing long trade from the small bullish pin candlestick which rejected the support level I had identified at 1.3429.

Today’s USD/CAD Signals

Risk 0.75% per trade.

Trades must be taken between 8am London time and 5pm New York time today only.

Long Trades

  • Go long after the next bullish price action rejection following the next touch of 1.3359 or 1.3338.
  • 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 run.

Short Trades

  • Go short after the next bearish price action rejection following the next touch of 1.3417 or 1.3463.
  • 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 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.

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USD/CAD Analysis

I wrote yesterday that we have seen the price fall right back into its long-term range over the past day and not respect any of the key support or resistance levels which were reached. This suggests a lack of trend and unpredictable price movement, but there is definitely some short-term bearish momentum. I wanted to avoid trading this pair until the price action becomes clearer.

Action is now clearer, with the bearish momentum following through, and the price now seems close to breaking down below its multi-week consolidation. If the price can break below 1.3338 it would be a bearish sign, so as such a bullish bounce at that level, which is likely to be a pivotal point, could be a sign for an excellent reward to risk long trade entry over the medium term.

usdcad

There is nothing important due today concerning the CAD. Regarding the USD, there will be a release of ISM Non-Manufacturing PMI data at 3pm London time.

Adam is a Forex trader who has worked within financial markets for over 12 years, including 6 years with Merrill Lynch. He is certified in Fund Management and Investment Management by the U.K. Chartered Institute for Securities & Investment.