Yesterday’s signals were not triggered, as there was no bullish price action at any of the key support levels which were reached.
Today’s USD/CAD Signals
Risk 0.50% per trade.
Trades may only be taken before 5pm New York time today.
Long Trade 1
- Go long after the next bullish price action rejection following a first touch of 1.3210.
- Put 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.
- 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 Trades
- Go short after the next bearish price action rejection following a first touch of 1.3312 or 1.3373.
- Put 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.
- 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
This pair seized the market’s attention during the latter part of yesterday’s New York session when the Bank of Canada’s Senior Deputy Governor Wilkins suggested a rate hike might be on the way. This had the effect of sending the Canadian Dollar sharply higher, and the effect is still being felt in trading as I write hours later, with the Loonie going on to make new highs. This pair was no exception, and the price cut through three major levels of anticipated support like a knife through butter.
There is no long-term trend in this pair, which suggests that the move should end in a significant pull back. However, it is too early to say how much further this pair might fall before that happens. I would be very careful in taking any long trade today. A quick pull-back to the nearest resistance at 1.3312 could be an excellent opportunity to enter a short trade.
There is nothing due today concerning the CAD. Regarding the USD, there will be a release of PPI data at 1:30pm London time.