USD/CAD Forex Signal

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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.

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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.USDCADThere is nothing of high importance due today concerning either the CAD or the USD.

Adam is a Forex trader who has worked within financial markets for over 12 years, including 6 years with Merrill Lynch. He is certified in Fund Management and Investment Management by the U.K. Chartered Institute for Securities & Investment.