USDCAD: 1.3185 holds as support again
Yesterday’s signals were not triggered, as the price action when 1.3185 was reached was insufficiently bullish.
Today’s USD/CAD Signals
Risk 0.50% per trade.
Trades may only be entered between 8am London time and 5pm New York time today.
Long Trade Ideas
Go long after the next bullish price action rejection following the next touch of 1.3185, 1.3151, or 1.3120.
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 the bearish trend line currently sitting at about 1.3280.
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 saw the best opportunity as fading a spike to any key level following that (U.S. inflation data) release – apart from that, I doubted there will be much opportunity here, although a long from a strong bullish bounce at 1.3185 could still be a good trade.
This was a great call as the price spiked down to the key support level at 1.3185 before recovering quickly – using price action on a time frame such as the hourly would probably not have got you into this trade at a competitive price.
The price chart below shows this medium-term support level at 1.3185 holding for quite a long time, while the price has room to rise, although we are now starting to see an obvious bearish trend line at about 1.3280.
I think the price will slowly struggle up from this supportive area based on 1.3185 but will take a while to break above the bearish trend line. I think the move will be so slow that I won’t take a bullish bias, but I think long trades here are likely to be more successful than any short ones.
There is nothing of high importance due today concerning either the CAD or the USD.