USDCAD: Resistance holds at 1.3164
Yesterday’s signals produced a profitable short trade from the bearish pin candlestick which rejected the resistance levels at 1.3153 and 1.3164.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades must be taken prior to 5pm New York time Wednesday only.
Long Trade Ideas
Go long after the next bullish price action rejection following the next touch of 1.3120 or 1.3104.
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 Ideas
Go short 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 I would take a bullish bias if we got two consecutive hourly closes above 1.3164 later. Before that happened, there was a good chance that this bullish move would fail at 1.3150 or a little higher and the price would fall back into its range, but the support between 1.3100 and 1.3120 could prove to be very strong now, so there was also the opportunity of a potential long trade from a bullish bounce in this area if it happened later.
This was a good call as I was correct to see 1.3164 as a major pivotal point – it capped the high of the day and gave a profitable short trade.
We have had a significant bullish breakout above 1.3120, but it has not yet managed to break above 1.3164. I again look to this level to be pivotal and would be more bullish above it if the price can get there, but for now, a potential long trade at 1.3120 or 1.3104 is what I am watching out for.
There is nothing of high importance due today regarding either the CAD or the USD.