USDCAD: Bulls testing big number at 1.3250
Last Thursday’s signals were not triggered, as there was insufficiently bullish price action near 1.3186.
Today’s USD/CAD Signals
Risk 0.50% per trade.
Trades may only be taken until 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, 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 Idea
Go short after the next bearish price action rejection following the next touch of 1.3250, 1.3277, 1.3302.
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 last Thursday that the picture was now much more bullish as the price seemed to have broken solidly above the 1.3200 area, with the U.S. Dollar significantly stronger against almost every other major currency. For this reason, I was ready to take a long bias here if there was a solid bullish bounce at any support level following a bearish retracement.
This was a reasonably good call as it reflects what has happened since the forecast was made, with the price holding up above the 1.3185 level but also not breaking above the major resistance level and psychological number at 1.3250.
This pair is in a strange position, as the U.S. Dollar is quite weak, but the Canadian Dollar (as a commodity currency) is even weaker in the current risk-off market environment.
This suggests that we may get a bullish movement, but bulls will probably really struggle to get the price established above 1.3250.
This means that we are most likely to see the price continue to range within the 1.3185 to 1.3250 area, potentially giving scalping opportunities from both extremes. However, as it is a public holiday in Canada, liquidity may be very thin so it may be best to focus elsewhere now.
There is nothing of high importance due today concerning the CAD: it is a public holiday in Canada today. Regarding the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time.