Yesterday’s signals produced a profitable long trade following the bullish outside candle which formed on the hourly chart rejecting the anticipated support level at 1.2596. It looks as if the move has run out of steam so it would probably be a good idea to close any such trade.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades may only be entered between 8am and 5pm London time today.
Long Trades
- Go long after the next bullish price action rejection following a first touch of 1.2596 or 1.2565.
- 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 Trade 1
- Go short after the next bearish price action rejection following a first touch of 1.2701.
- 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
There was an initial downwards movement yesterday which broke below the first support level, which has now been erased from the chart below, but the lower support level just below 1.2600 has held and provided a small but sharp upwards movement. Such upwards moves are always likely to be short-lived where there is a strong downwards trend, as there is here in this currency pair. The price is moving sideways now, but the best set-up looks as if it would be another rejection of 1.2700, which could provide a good short trade entry.
There is nothing due today concerning the CAD. Regarding the USD, there will be a release of Building Permits data at 1:30pm London time, followed by Crude Oil Inventories at 3:30pm.