USDCAD: 1.3000 area holds up
Yesterday’s signals were not triggered, as neither of the key levels were ever reached.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades may only be entered before 5pm New York time Tuesday.
Long Trade Idea
Go long after the next bullish price action rejection following the next touch of 1.2962.
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
Go short after the next bearish price action rejection following the next touch of 1.3059 or 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 as if we would see a reasonably strong downwards movement which may break much further, either today or tomorrow, so I was taking a bearish bias on this currency pair over the day as it threatened to reach new multi-month low prices.
This did not work out well, as the price could not break below its recent lows and turned around with relatively firm bullish volatility to rise. The price is now threatening to break above the resistance level at 1.3059 which is likely to be today’s pivotal point. If the price can get established above that level as we start the New York session, it is likely to rise further, but as this is out of sync with the action in other commodity currencies (the AUD and the NZD remain bullish against the USD), I would stand aside from trading this pair today.
In any case, if the price ends today well above 1.3060, that is likely to be the end of the prospect of a major bearish breakdown below 1.3000 for some time to come.
There is nothing of high importance due today regarding the CAD. Concerning the USD, there will be a release of Retail Sales data at 1:30pm London time, followed by minor speeches from the Chair of the Federal Reserve at 6pm and FOMC Member Evans at 8:30pm.