Yesterday’s signals were not triggered, as none of the key levels were ever reached.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades may only be taken before 5pm New York time today.
Long Trade
Go long after the next bullish price action rejection following the next touch of 1.2750.
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
Go short after the next bearish price action rejection following the next touch of 1.2946.
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 the support at 1.2814 was starting to look more likely to break down, but that I would not take a bearish bias until the price was established below 1.2814. I have been wrong, at least so far, in expecting the price to break below 1.2814: surprisingly, the level has again acted as good support, and the price has now formed a multi-day consolidation zone, which can be clearly seen in the price chart below. This means that there is no change to the technical picture, nor to my bias, which is very cautiously bullish above 1.2814, and bearish below that level. I still expect it will break down soon and that we will not see 1.2946 before it does.
Although the U.S. Dollar is generally strong (despite last night’s somewhat dovish FOMC statement), if there is geopolitical disruption in the Gulf region over the coming weeks, we are likely to see the price of Crude Oil rise strongly, which should give the Canadian Dollar a boost.
Concerning the CAD there will be a release of Trade Balance data at 1:30pm London time. Regarding the USD, there will be a release of ISM Non-Manufacturing PMI data at 3pm.