USDCAD: Bearish but more support closer to 1.3000 level
Yesterday’s signals produced a profitable short trade from the bearish rejection of the resistance level at 1.3120, but it only made the minimum 20 pips of profit so far.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades must be taken prior to 5pm New York time today only.
Long Trade Idea
Go long after the next bullish price action rejection following the next touch of 1.3045.
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 1.3120 or 1.3177.
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 despite the bearish picture, it seemed likely we would get some kind of bullish bounce soon. I was very interested in a long trade off a bullish bounce at the key level of 1.3045. We did get this bullish bounce, but only to the resistance level at 1.3120 which held firmly, providing a short trade entry, although that has only given minimal profit.
Support and resistance levels are quite clearly defined here, although we have a weak but real long-term bearish trend. The issue for bears is that as the price gets closer to the key support level of 1.3045 and the round number at 1.3000, the more likely we are to see a major bullish reversal. For these reasons, I will take a bearish bias today if we get a bearish reversal at 1.3120, or a bullish bias if we get a bullish reversal at 1.3045.
There is nothing of high importance due today concerning either the CAD or the USD.