USDCAD: Short from above 1.3325?
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 may only be entered from 8am London time until 5pm New York time today.
Long Trade Ideas
Long entry after the next bullish price action rejection following the next touch of 1.3247 or 1.3226.
Place the stop loss 1 pip below the local swing low.
Adjust the stop loss to break even once the trade is 20 pips in profit.
Take off 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to run.
Short Trade Ideas
Short entry after the next bearish price action rejection following the next touch of 1.3345 or 1.3365.
Place the stop loss 1 pip above the local swing high.
Adjust the stop loss to break even once the trade is 20 pips in profit.
Take off 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to run.
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 it was looking as if this pair was just going to make wide swings within this area of long-term consolidation, which seemed likely to hold for some time going forward.
I thought that the way to go on this currency pair was to trade rejections of the extremes: looking for longs around 1.3186 and shorts around 1.3345.
It is too early to really test the validity of this forecast, maybe, but the price has remained within the range so far. There is a very weak long-term bullish trend, so it is likely that a sustained bullish breakout beyond 1.3365 would be a very interesting and bullish development. However, it seems likely that the range will hold for some time, so I would still look to trade reversals at either of the resistances above. The price chart below shows that we keep getting selling action every time the price approaches 1.3325 and we also have a new bearish trend line waiting for its crucial third touch in that area, so we could get an interesting short trade set-up in that area.
I would take a cautious bearish bias if we get a solid bearish reversal between 1.3325 and 1.3365 today.
There is nothing of high importance due today concerning the CAD. Regarding the USD, there will be a release of Preliminary GDP data at 1:30pm London time.