USDCAD: Pivotal point at 1.3062?
Yesterday’s signals were not triggered, as there was no bearish price action at 1.3059.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades must be taken between 8am London time and 5pm New York time Wednesday.
Long Trade Idea
Long entry after the next bullish price action rejection following the next touch of 1.3062.
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 Trade Idea
Short entry after the next bearish price action rejection following the next touch of 1.3120.
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 the price was threatening to break above the resistance level at 1.3059 which was likely to be the day’s pivotal point. I also thought that if the price ended the day well above 1.3060, that would likely be the end of the prospect of a major bearish breakdown below 1.3000 for some time to come.
This was a good call as the price did close the day well above 1.3060, and this area looks likely to again be the day’s pivotal point. If the support at 1.3062 holds, it will make a medium or even long-term bullish reversal more likely.
A long trade at a firm bounce here could be a good idea, but it may not go very far after the Chair of the Federal Reverse signalled monetary accommodation yesterday, so a conservative profit target would probably be wise.
There is nothing of high importance due today regarding the USD. Concerning the CAD, there will be a release of CPI (inflation) data at 1:30pm London time.