USDCAD: More bullish
Yesterday’s signals were not triggered, as there was insufficiently bearish price action at 1.3301 when the price was first reached.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades must be entered prior to 5pm New York time.
Long Trade Ideas
⦁ Long entry after the next bullish price action rejection following the next touch of 1.3251 or 1.3202.
⦁ 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 1.3359.
⦁ 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 the price was evenly balanced between bulls and bears, with support at 1.3251 and resistance at 1.3301. On this quiet Monday in the absence of any major scheduled news releases, these levels were likely to hold.
I was wrong, as the price action was more bullish than I expected, with the price getting above 1.3301 and invalidating that resistance level quite soon after New York opened.
The price action continues to look bullish. There is an inflection area at 1.3325 which may act as resistance, and then further ahead the key resistance levels of 1.3345 and 1.3359 which mark a key resistance zone which held firm last summer, so it may be ripe to produce a major bearish reversal if the price gets there.
If the price can get established above 1.3359, it would be a bullish sign. Short-term momentum at the time of writing is with the bulls.
There is nothing of high importance due today concerning the CAD. Regarding the USD, there will be a release of CB Consumer Confidence data at 3pm London time.