USD/CAD Forex Signal

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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.

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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.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.