USDCAD: Falling to new 3-month lows
Last Thursday’s signals were not triggered, as there was no bullish price action at 1.3204.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades must be taken before 5pm New York time today only.
Long Trade
Long entry after the next touch of 1.3054.
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 ride.
Short Trades
Short entry after the next bearish price action rejection following the next touch of 1.3250 or 1.3277.
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 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 we now have a long-term bearish trend and it looked as if the price was really going to start moving down now. I took a bearish bias today until at least 1.3200 is reached. This was a good call as although the price has not moved down much more, it did continue down last Thursday to hit 1.3200. It is not just that the USD is weak, we also have a situation where tensions in the Gulf are pushing up the price of Crude Oil which in turns helps the CAD as Canada is a major oil producer and its currency is related oil to some extent.
Although the price has been consolidating for many hours, there are no key support levels until 1.3054, so the line of least resistance is certainly down. If the USD weakens further or there are any more incidents or clashes in the Gulf, I would see this pair as very likely to move down further. I would take a bearish bias here if the price retraces to the big psychological level at 1.3250 and makes a strong failure and begins to move down again.
There is nothing of high importance due today regarding either the CAD or the USD.