USDCAD: Wide consolidation
Yesterday’s signals were not triggered, as none of the key levels were ever reached.
Today’s USD/CAD Signals
Risk 0.50% per trade.
Trades must be taken between 8am London time and 5pm New York time today only.
Long Trade Ideas
Go long after the next bullish price action rejection following the next touch of 1.3247 or 1.3226.
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 1.3345 or 1.3365.
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 we had an unexpectedly bearish development as the price finally broke below the psychologically important 1.3250 level confluent with this horizontal resistance.
I thought that the outlook was more bearish and was seeking a short trade entry opportunity following another bearish rejection of 1.3251
This was not a great call, as the price made a sharp and strong bullish turn which put it right back into its long-term consolidation range. From this move, we can draw two new support levels between 1.3225 and 1.3250.
It looks as if this pair is just going to make wide swings within this area of long-term consolidation, which seems likely to hold for some time going forward.
I think that the way to go on this currency pair for now is to trade rejections of the extremes: look for longs around 1.3186 and shorts around 1.3345.
If and when the price eventually breaks solidly above 1.3365, that is going to be a very bullish sign.
There is nothing of high importance due today concerning the CAD. Regarding the USD, there will be a release of Crude Oil Inventories data at 3:30pm London time.