Yesterday’s signals produced both a profitable short and then long trade yesterday, with both of the nearby support and resistance levels holding!
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades must be entered from 8am London time to 5pm New York time today only.
Long Trades
- Go long after the next bullish price action rejection following the next touch of 1.3442 or 1.3402.
- 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 1.3475 or 1.3529.
- 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 yesterday that bulls and bears looked evenly balanced, which meant rejections of any key level in either direction probably won’t have much to differentiate them.
I had no directional bias on this pair and thought that there probably wouldn’t be any great trading opportunities here. The most attractive levels were the support at 1.3402 and the resistance at 1.3529.
This was a good call as both the levels held, and the more profitable trade would have been the long entry from 1.3402.
The resistance at 1.3475 seems to be holding so far.
We have a tricky trading situation here and important data for both currencies due later, especially the Canadian Dollar, so it would probably be wise to book any profit and stand aside until after the data releases. There is no trend but if the price can end the day above 1.3529, that would be a bullish breakout.
Regarding the CAD, there will be a release of GDP data at 1:30pm London time, followed by the Governor of the Bank of Canada testifying before Parliament at 4pm. Concerning the USD, there will be a release of CB Consumer Confidence data at 3pm.