Yesterday’s signals were not triggered as the price action at 1.2522 was insufficiently bearish to justify a short trade entry.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades must be taken before 5pm New York time today only.
Long Trades
- Long entry after the next bullish price action rejection following a first touch of 1.2411, 1.2406, or 1.2389, especially at a rejection of two or more of these levels simultaneously.
- 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 1.2522 or 1.2534.
- 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
This pair is in a strong and sustained long-term downwards trend. However, it appears that there is a pause in the trend, as the price consolidates between roughly 1.2400 and 1.2500. The key support and resistance levels I have identified in previous charts, and in today’s chart, are holding. I wrote yesterday that if the price could not get below the recent lows or at least close to them, then another rise to the area above 1.2500 would be probable, and might provide another good opportunity to enter a short trade. This seems to have played out already, and at the time of writing a move down to 1.2450 looks likely over the short term.
The printing of new support just below 1.2450 makes the picture a little more bullish, and increases the odds of a deeper bullish reversal with a break up beyond 1.2534.
There is nothing due today concerning the CAD. Regarding the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time.