USDCAD: Major bullish reversal shaping up
Yesterday’s signals were not triggered, as none of the key levels were ever reached.
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 Trade Ideas
Long entry after the next bullish price action rejection following the next touch of 1.3082 or 1.3055.
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 Idea
Short entry after the next bearish price action rejection following the next touch of 1.3153 or 1.3164.
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 yesterday that it looked like a medium or even long-term bullish reversal was finally in place, but movement was likely to be relatively slow and choppy. Bulls will be looking for a price to get established above 1.3164 as a confirmation of this potential reversal.
This was a good call as the price has continued to advance, but the resistance levels not far above the current price are strong and have held for quite a while, so a short here after the FOMC minutes release due later might be a good trade. In any case, those resistance levels are likely to be today’s pivotal point, but the price will probably break or fail there only after the FOMC release.
If the price breaks above 1.3164 with good momentum, it is likely to be a strong bullish move.
Regarding the CAD, there will be releases of the Bank of Canada’s Monetary Policy Report, Rate Statement, and Overnight Rate at 3pm London time. Concerning the USD, the Chair of the Federal Reserve will be testifying before the House of Congress at 3pm, and there will be a release of FOMC Meeting Minutes at 7pm.