Yesterday’s signals were not triggered, as there was insufficiently bullish price action the first time the support level at 1.3000 was reached.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades may only be entered between 8am and 5pm New York time today.
Long Trade
- Long entry after the next bullish price action rejection following the next touch of 1.2826.
- 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 Trades
- Short entry after the next strongly bearish price action rejection following the next touch of 1.3085 or 1.3136.
- 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 yesterday that I would want to see the price get out of the 1.3000 to 1.3085 range before entering any more trades. The price has not left this range yet but has hit the 1.3000 level a couple of times, which is looking increasingly likely to break down. A break below 1.3000 could trigger a sharp downwards movement as there are no support levels for about 175 pips below that. I would have a bearish bias if the price can get established below 1.3000 today, but much is likely to depend upon the ADP release due later.
There is nothing important due today concerning the CAD. Regarding the USD, there will be a release of the ADP Non-Farm Employment Change data at 1:15pm London time, followed by ISM Manufacturing PMI at 3pm, Crude Oil Inventories at 3:30pm, and the FOMC Statement and Federal Funds Rate at 7pm.