Yesterday’s signals produced a nice, profitable long trade following the bullish pin candlestick rejection of the support level identified at 1.2641.
Today’s USD/CAD Signals
Risk 0.50% per trade.
Trades may only be entered before 5pm New York time today.
Long Trades
Go long after the next bullish price action rejection following the next touch of 1.2641 or 1.2590.
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
Go short after the next bearish price action rejection following the first touch of 1.2746, 1.2787, or 1.2846.
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
Yesterday I highlighted the support level at 1.2641, pointing out that there is no long-term trend and therefore it is best to trade this pair, if you are going to trade it, by paying attention to news items and short-term reversals off key support and resistance levels. This worked out quite well, with an obvious bullish rejection of 1.2641 playing out. The bullish movement seems as if it might now have run out of steam. The price is in the middle of nowhere now, but there is major news due later, so it is probably best to stand aside until the Canadian data release gives the pair some direction.
Regarding the CAD, there will be a release of the Bank of Canada’s Rate Statement and Overnight Rate at 3pm London time. Concerning the USD, there will be a release of the ADP Non-Farm Employment Change at 1:15pm, followed by Crude Oil Inventories at 3pm.