Yesterday’s signals were not triggered as there was insufficiently strong bullish price action at 1.2353, although the level has acted as effective support so far.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades may only be taken until 5pm New York time today.
Long Trades
- Go long after the next bullish price action rejection following a first touch of 1.2353, 1.2278 or 1.2256.
- 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
- Go short after the next bearish price action rejection following a first touch of 1.2448, 1.2491, or 1.2547.
- 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
The strong downwards push has flattened out, with the price meeting and being held by the support level at 1.2353. I would still maintain a bearish bias, as the buying does not look very strong. This looks like a pause, not a reversal. In any case, there is key new due later today for both currencies, particularly the CAD, so the price could be pushed anywhere, with technical considerations possibly taking a back seat. If the news is positive for the CAD and negative for the USD, we could see a particularly strong downwards movement, due to the strong bearish trend providing a tailwind.
Concerning the CAD, there will be a release of Trade Balance data at 1:30pm London time, followed by the Bank of Canada’s Rate Statement and Overnight Rate at 3pm. Regarding the USD, there will be a release of ISM Non-Manufacturing PMI data, also at 3pm.