Yesterday’s signals produced a profitable short trade following the bearish outside candle on the hourly chart rejecting the anticipated resistance level identified at 1.2702. It would be wise to protect profits here if not already done.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades must be entered by 5pm New York time today only.
Long Trades
· Long entry after the next bullish price action rejection following a first touch of 1.2620, 1.2541, or 1.2522.
· 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 1.2702 or 1.2774.
· 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 I forecasted that the price would soon reach 1.2700 and that this level would provide a key test. This is what happened and in light trading, the level has so far held intact. The selling does not look very convincing though. A new rally and a break above 1.2702 would be a very bullish sign. A sustained break below 1.2620 would suggest that the long-term downwards trend is resuming, yet that looks unlikely to happen until Thursday at the earliest.
There is nothing due today concerning either the CAD or the USD.