USDCAD: Bearish flag pattern dominates
Yesterday’s signals were not triggered, as the bullish price action took place a little way below my support level identified at 1.3120 and as there was no bearish price action when 1.3160 was reached.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades must be taken prior to 5pm New York time today.
Long Trade Ideas
⦁ Long entry after the next bullish price action rejection following the next touch of 1.3140, 1.3119, or 1.3100.
⦁ 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 1.3189 or 1.3240.
⦁ 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 direction seemed to be uncertain, so the best approach was likely to be fading any spike to one of the more extreme key levels after one of the major news releases which were due concerning both currencies. This was a pretty good call, as it was enough to stay out of trouble, and regarding direction it was also correct has movement has been aimless over the past 24 hours.
Technically, the picture is becoming confused: despite a support level replacing resistance nearby, the dominant feature within the chart below is the bearish flag marked by the symmetrical trend lines. When any kind of channel is very symmetrical, it is worth respecting. This means that the pivotal points are likely to be either 1.3189 or 1.3100 as both are quite confluent with the current position of these trend lines.
A breakout beyond these levels could be traded as continuations or bounces off these levels traded as reversals. Profit targets should probably be conservative.
There is nothing of high importance due today concerning either the USD or the CAD.