Last Thursday’s signals produced a nicely profitable short trade following the bearish pin candlestick which rejected the resistance level identified at 1.3332.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades must be taken before 5pm London time today.
Long Trade
- Go long after the next bullish price action rejection following the next touch of 1.3165.
- Place 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.
- 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.
Short Trades
- Go short after the next bearish price action rejection following the next touch of 1.3262, 1.3282, or 1.3332.
- Place 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.
- 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 last Thursday that as the U.S. Dollar was still quite bullish at present, so higher prices would not be a surprise over the course of the day, although I took no directional bias here. The price rose strongly after initially pausing at the first resistance level before finally topping nicely at the obvious swing high resistance of 1.3323, giving a nice short trade opportunity.
There is some volatility here, mainly due to active trading in Crude Oil which is making some long-term new high prices, which is strengthening the Canadian Dollar. For this reason, shorts will probably be better than longs, but overall the price will probably move little today and just consolidate due to the U.S. holiday. I have no directional bias and note that over the medium-term, the price has gone all over the place, making trading this pair typically unpredictable.
There is nothing of high importance due today regarding the CAD. Concerning the USD, it is a public holiday in the U.S.A.