Yesterday’s signals were not triggered as there was no bullish price action at either 1.2669 or 1.2605.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades may only be entered until 5pm New York time today.
Long Trade
· Go long after the next bullish price action rejection following the next touch of 1.2530.
· 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.
· 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 Trade
· Short entry after the next bearish price action rejection following the next touch of 1.2669.
· 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.
· 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
I wrote yesterday that it currently looks as if the best opportunities are going to be on the short side. This turned out to be correct, with the Canadian Dollar continuing to gain against the greenback, as most other major currencies did during the same period. The new strength in the Canadian Dollar is due to the strong survey data released earlier this week which is seen as making a rate hike increasingly likely. The former support levels which have been breached have now been flipped to new resistance. There is every technical reason to remain bearish, especially if the new resistance at 1.2605 continues to hold. However, the week will enter a new phase later today with key U.S. economic data releases, which could change sentiment and medium-term trend – and that is what is driving this currency pair.
There is nothing important due today concerning the CAD. Regarding the USD, there will be a release of CPI data at 1:30pm London time, followed by Crude Oil Inventories at 3:30pm and the FOMC Meeting Minutes at 7pm.