Yesterday’s signals were not triggered, as there was no bullish price action when any of the key support levels given for possible long trade entries were reached.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades must be entered before 5pm New York time today only.
Long Trades
- Long entry after the next bullish price action rejection following a first touch of 1.2204 or 1.2145.
- 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 Trades
- Short entry after the next bearish price action rejection following a first touch of 1.2256 or 1.2278.
- 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
Anticipating yesterday’s guidance from the Bank of Canada, I wrote that “if 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.” This is exactly what happened when the Bank of Canada made a surprise interest rate hike of 0.25%, raising the base rate to 1.00%. The pair then immediately fell by more than 250 pips, and seems to still have some selling momentum, which suggests that even lower prices could be made. Yesterday’s low was the lowest price this pair has reached in more than 2 years, so the price is truly trading in “blue sky”. There is every reason to be bearish on this pair, and to expect that yesterday’s low will at least be retested.
There is nothing due today concerning the CAD. Regarding the USD, there will be a release of Unemployment Claims data at 1:30pm London time, followed by Crude Oil Inventories at 3pm.