Yesterday’s signals were not triggered, as there was no bullish price action at 1.3442 or 1.3402.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades may only be taken between 8am London time and 5pm New York time today.
Long Trade
- Long entry after the next bullish price action rejection following the next touch of 1.3338.
- 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 1.3402 or 1.3475.
- 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 as we had important data due for the Canadian Dollar, so it would probably be wise to book any profit and stand aside until after the data releases. This worked OK as there was short profit on the table to be taken, but the trade would have been even more profitable if allowed to run as the price continued to fall and cut through support levels.
The Canadian GDP release was surprisingly negative, coming in as a contraction and hinting at the start of a possible recession, but strangely the Canadian Dollar quickly recovered. This is party due to U.S. Dollar weakness.
Today we have the FOMC release which usually makes a big impact upon this pair. It could send the price anywhere but is often best exploited as a spike to be traded as a reversal at an extreme. I have a feeling a long at 1.3338 could be a great trade to take around the time of the FOMC release later today.
There is no long-term trend and I have no directional bias on this currency pair.
Regarding the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time, followed by the FOMC Statement and Federal Funds Rate at 7pm and the press conference half an hour later. Concerning the CAD, the Governor of the Bank of Canada will be testifying before Parliament at 9:15pm.