USD/CAD Forex Signal

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USDCAD: Bullish breakout above 1.3120

Yesterday’s signals were not triggered as the bearish price action at 1.3120 was insufficiently strong.

Today’s USD/CAD Signals

Risk 0.75% per trade.

Trades may only be entered from 8am London time until 5pm New York time Tuesday only.

Long Trade Ideas

  • Long entry after the next bullish price action rejection following the next touch of 1.3120 or 1.3104.
  • 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 Trade Ideas

  • Short entry after the next bearish price action rejection following the next touch of 1.3153 or 1.3164.
  • 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 the price seemed very evenly stuck between 1.3020 and 1.3100 or maybe 1.3120 with no hint as to in which direction the eventual substantial move would come. For these reasons, I thought that trading this pair would be best avoided except perhaps for rejections of this range. I was wrong: the price has actually finally made a strong bullish breakout of this range and is now trading above 1.3120. it faces a little more resistance, but if it gets established above 1.3164 it has room to rise a lot further without meeting any likely key resistance levels. I would take a bullish bias if we get two consecutive hourly closes above 1.3164 later. Before that happens, there is a good chance that this bullish move will fail at 1.3150 or a little higher and the price will fall back into its range, but the support between 1.3100 and 1.3120 could prove to be very strong now, so there is also the opportunity of a potential long trade from a bullish bounce in this area if it happens later.

usdcad

There is nothing of high importance due today regarding either the CAD or the USD.

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.