Yesterday’s signals were not triggered, as there was no bearish price action at 1.2952.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades may be taken between 8am London time and 5pm New York time today only.
Short Trade
Short entry after the next strongly bearish price action rejection following the next touch of 1.3089.
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.
Take off 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to ride.
Long Trades
Long entry after the next strongly bullish price action rejection following the next touch of 1.3011 or 1.2952.
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.
Take off 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 the medium-term signs such as the double top at about 1.3000 did suggest that the primary movement here is downwards. It thought it looked as if the price were heading towards 1.2884 now.
This turned out to be completely wrong, as the price made a strong upwards movement in a day which say saw similar moves in most markets. What was most interesting here was that the move was generally against the U.S. Dollar whereas here the move was against the Canadian Dollar, which makes the Canadian Dollar more or less the weakest major currency in this move. This was probably due to the market’s sentiment seeing a U.S. recession as more likely, which drove down the cost of Crude Oil, which in turn hit the Canadian Dollar. This is logical, but I’m speculating, and it doesn’t really matter. What matters now for traders is knowing that if this market sentiment persists and stock markets continue to plunge, we are likely to see continuing weakness in the Canadian Dollar. There is no long-term trend in this pair to exploit.
Technically, the best analysis that can be made is that if the price remains firmly above 1.3000 for a while, it will probably continue to rise.
There is nothing important due today concerning the CAD. Regarding the USD, there will be a release of CPI data at 1:30pm London time.