USDCAD: Bullish but failure to make clean breakout beyond 1.3500
Last Thursday’s signals were not triggered, as the price failed to reach either of the key levels during the specified time.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades must be taken between 8am London time and 5pm New York time today.
Long Trades
Go long after the next bullish price action rejection following the next touch of 1.3479 or 1.3463.
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
Go short after the next bearish price action rejection following the next touch of 1.3512 or 1.3565.
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 last Thursday that another bullish attempt at 1.3529 was probably going to happen later today or over the coming days. I was ready to take a bullish bias if the price could trade above 1.3529 for a couple of hours consecutively.
This was a good call as the price did make another bullish attempt, but it did not happen until an unusually late time in the day, so I was not set up to try to exploit that.
The picture is less bullish, as despite the upwards thrusts to areas above 1.3529, the price keeps falling back, and has now even printed lower resistance. The problem is that risk-averse markets have been selling Crude Oil heavily which hits the Canadian Dollar every time is tries to rise. However, the U.S. Dollar has also been quite weak, which leaves us with nothing firm to really base trades on here.
I will not take a bullish bias on this currency pair, but I think the best opportunity today would be a long trade entry following a strong bullish bounce at any of the listed support levels which are shown in blue in the price chart below.
There is nothing important due today concerning the CAD. Regarding the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time.