Yesterday’s signals were not triggered as there was no bullish price action at 1.2839.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades must be taken before 5pm London time today only.
Long Trades
- Long entry after the next bullish price action rejection following a first touch of 1.2694 or 1.2656.
- Place 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.
- 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 Trades
- Short entry after the next bearish price action rejection following a first touch of 1.2774 or 1.2839.
- Place 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.
- 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
Yesterday the Bank of Canada raised interest rates by 0.25%. Although this was generally expected, it still had the effect of giving a strong boost to the Canadian Dollar, and so even though the U.S. Dollar was recovering at the time of the announcement, the price moved down to make a new 1-year low, cutting through a couple of anticipated support levels before finally bouncing bullishly off an intact level at 1.2694.
It must be said that this pair is in a long-term bearish trend, even though this pair has tended to not trend very strongly, except in very recent years. I expect that a pull back to 1.2775 could provide a good short trade entry if the price turns bearish upon reaching that area.
There is nothing due today concerning the CAD. Regarding the USD, there will be releases of PPI and Unemployment Claims data at 1:30pm London time, followed at 3pm by the testimony of the Chair of the Federal Reserve before Congress.