Last Thursday’s signals produced a profitable short trade following the bearish pin candlestick on the hourly chart which rejected the resistance level at 1.3275.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades may only be entered before 5pm New York time, over the next 24-hour period.
Long Trades
Long entry after the next bullish price action rejection following the next touch of 1.3100 or 1.3047.
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 run.
Short Trade
Short entry after the next strongly bearish price action rejection following the next touch of 1.3160.
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 run.
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 last Thursday that I expected higher prices over the short term, but it was quite likely that the rise will be halted at about 1.3220 where there was minor resistance. I was right about higher prices that day, but the reversal came much higher than 1.3220, happily at a level I had marked as resistance, providing an opportunity for a profitable short trade.
The chart below shows that the price has been essentially ranging for some time, with quite a lot of movement, so it seems that the best approach here is to fade the extreme levels. Longs as close as possible to the big psychological round number at 1.3000 are likely to have the greatest potential for profit. I have no directional bias today.
There is nothing important due today concerning either the CAD or the USD.