Yesterday’s signals produced a short trade entry following the bearish rejection of the resistance at 1.3284. The trade is approximately at break even but is not working out well so would probably best be exited immediately.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades may only be taken until 5pm New York time today.
Long Trade
Long entry after the next bullish price action rejection following the next touch of 1.3250.
Put 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 run.
Short Trades
Short entry after the next bearish price action rejection following the next touch of 1.3310 or 1.3332.
Put 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 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 there was still some bearish momentum, but it looked as if the price needs a bullish retracement first. There could be good opportunities for more possible short trades at 1.3250 (a key psychological level) or at the higher resistance level of 1.3284 – I would take a bearish bias if either of these set-ups occurred later.
This was a good call as we did get a strong bullish retracement, in fact it made a classic “U” shape which is usually impulsive, but as I expected, the resistance at 1.3284 held. However, after moving down from there, the price has found new higher support at 1.3250 suggesting we have a strong struggle between bulls and bears in this narrow area which makes it dangerous to be in any position.
I think it is quite likely that we will see a break above 1.3284 today, but the resistance levels above that could still be interesting for short trades later.
There is nothing of high importance due today regarding the CAD. Concerning the USD, there will be a release of CB Consumer Confidence data at 3pm London time.