USDCAD: Back within long-term range area
Yesterday’s signals were not triggered, as there was no bearish price action at either of the resistance levels which were reached.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades may only be taken prior to 5pm New York time today.
Long Trade Ideas
Go long after the next bullish price action rejection following the next touch of 1.3308 or 1.3247.
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
Go short after the next bearish price action rejection following the next touch of 1.3345 or 1.3359.
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 this pair was looking more bullish, as it threatened to finally truly break out of this range which had been holding it in a very weak bullish trend for quite a long time.
I saw that the zone from 1.3345 to 1.3365 was going to be the day’s pivotal point, or pivotal zone if you prefer. A short trade from this area could also be interesting upon a failed attempt at a bullish breakout.
This was a good call, as we did get a failed bullish breakout above 1.3365 and the price has fallen quite strongly and solidly from there to get back into the area of its long-term range.
This creates a more bearish technical picture.
It is still quite likely that the support level at 1.3308 will hold, so if the price completes its bearish retracement to that level and then gives a firm bullish bounce, I would be interested in taking a cautious bullish bias at that point. However, the Bank of Canada will be making its major monthly policy release on rates later, so we can expect volatility and unpredictable directional movement, meaning traders need to be very cautious as the time of these releases approach.
There is nothing of high importance due today concerning the USD. Regarding the CAD, there will be a release of Trade Balance data at 1:30pm London time followed by the Bank of Canada’s Rate Statement and Overnight Rate at 3pm.