USDCAD: 1.3050 is a major pivotal point
Yesterday’s signals were not triggered, as there was no bullish price action at 1.3082.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades may only be entered before 5pm New York time today only.
Long Trade Idea
Go long after the next bullish price action rejection following the next touch of 1.3050.
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 Idea
Go short after the next bearish price action rejection following the next touch of 1.3120.
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.
USD/CAD Analysis
I wrote yesterday that it looked like those resistance levels (about 1.3150 to 1.3164) were likely to be today’s pivotal point, but the price would probably break or fail there only after the FOMC release.
This was a good call on the pivoting, as although 1.3150 was never quite reached, the price moved strongly down from that area as the U.S. Dollar weakened, and the price is currently again testing the long-term support at 1.3050. A sustained break below 1.3050 or 1.3000 (the latter would be even better) would be a significant, long-term bearish breakdown signal in line with the long-term trend. I will take a bearish bias if the price starts breaking down and holding below 1.3050 during the New York session on above-average volatility.
There is nothing of high importance due today regarding the CAD. Concerning the USD, there will be a release of CPI (Inflation) data at 1:30pm London time today, followed by testimony from the Chair of the Federal Reserve before the Senate at 3pm.