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 be entered until 5pm New York time, during the next 24-hour period only.
Long Trade
Go long after the next bullish price action rejection following the next touch of 1.2826.
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 Trades
Go short after the next bearish price action rejection following the next touch of 1.3047 or 1.3141.
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 have been writing for several days now that playing the range will most probably continue to be the best strategy available, looking for longs at 1.2826 and shorts at 1.3047. However, I have also said that I see a greater potential for a strong directional move up than down once the price finally manages to break out of this range, as longer-term charts are getting bullish. I think this analysis has held up and continues to hold up, as the price is compressed but creeping up and threatening a bullish breakout which could be very strong.
If the price can convincingly break above 1.3050 it could go much further, and it might happen following the FOMC releases due a little while after London closes later today, so a bullish breakout trade set-up with high reward to risk could make sense. I have a bullish bias above 1.3050.
There is nothing due today concerning the CAD. Regarding the USD, there will be a release of PPI data at 1:30pm London time, followed by Crude Oil Inventories at 3:30pm and then the FOMC releases at 7pm followed by the usual press conference half an hour later.