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 entered between 8am London time and 5pm New York time today.
Short Trades
- Go short after the next strongly bearish price action rejection following the next touch of 1.2949 or 1.2988.
- 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.
Long Trade
- Go long after the next strongly 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.
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 bears should now be encouraged by this break below 1.2988, below which I was happy to take a bearish bias as long as the price action remains bearish. This was a reasonably good call as the price has fallen a little further over the past day. The Canadian Dollar is strong due to increased optimism that a new trade deal will be agreed by the end of this week between the U.S. and Canada. Technically, there remains plenty of room for the price to fall before reaching any key support levels.
Over the short-term, we see initial signs of a bullish double bottom forming at 1.2900. I would take a bullish bias today if the price can begin to break below 1.2900, or at a failure to rise above 1.2950.
There is nothing important due today concerning the CAD. Regarding the USD, there will be a release of Preliminary GDP data at 1:30pm London time followed by Crude Oil Inventories at 3:30pm.