USDCAD: Bearish trend starting to really get going
Yesterday’s signals were not triggered, as there was no bullish price action at any of the support levels which were reached.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades may only be entered 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 1.3204.
- 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 run.
Short Trades
- Short entry after the next bearish price action rejection following the next touch of 1.3250 or 1.3277.
- 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 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 there was no long-term trend in this pair, it made sense to look to the key support levels now, which have still not been breached. I saw 1.3345 or maybe just the half number at 1.3350 as likely to produce a bullish bounce if reached later today, so a quick scalp off such a bounce for a conservative profit target would probably be the best opportunity that might arise.
This was not a good call as the price has moved down solidly and cleanly, and this was accelerated by the FOMC release which had the effect of weakening the USD and boosting Crude Oil which has in turn had the effect of boosting the CAD.
We now have a long-term bearish trend and it looks as if the price is really going to start moving down now. I take a bearish bias today until at least 1.3200 is reached.
There is nothing of high importance due today regarding either the CAD or the USD.