USD/CAD Forex Signal - 8 August 2019

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USDCAD: Ranging from 1.3266 to 1.3345

Yesterday’s signals were not triggered, as although the resistance level identified at 1.3345 caught the high of the day right to the pip, there was not an appropriate bearish price action set-up on the hourly price chart to capture it.

Today’s USD/CAD Signals

Risk 0.50% per trade.

Trades must be entered between 8am London time and 5pm New York time today.

Long Trade Ideas

  • Long entry after the next bullish price action rejection following the next touch of 1.3266 or 1.3250.

  • 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.

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USD/CAD Analysis

I wrote yesterday that the picture had become more bullish now and it looked as if the price was going to continue to advance towards 1.3345, but I preferred to trade short of the AUD and NZD rather than the CAD.

This was a great call on direction and level: the price advanced over the day to make a daily high at 1.3345 precisely before falling back towards the nearest support at 1.3266, where it now hints at turning more bullish again over the short term. I should have been more optimistic about the CAD falling, as the AUD and NZD mostly recovered from their recent sharp falls.

The Canadian Dollar is in more focus as it now looks like the weakest major currency. This weakness comes mostly from the bear market in Crude Oil, as Canada is a major producer of crude oil.

For these reasons, it makes sense to look mostly towards the bullish side, so I would be prepared to take a bullish bias at a firm bullish bounce from any support level. The level at 1.3250, exactly confluent with a big psychological quarter-number, looks especially attractive for this purpose.USDCADThere is nothing of high importance due today concerning either the CAD or the USD.

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.