USDCAD: Price falls bearishly back into range
Yesterday’s signals were not triggered, as there was no bullish price action at 1.3151.
Today’s USD/CAD Signals
Risk 0.50% per trade.
Trades must be taken prior to 5pm New York time today.
Long Trade Ideas
- Go long after the next bullish price action rejection following the next touch of 1.3120 or 1.3104.
- 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 ride.
Short Trade Idea
- Go short after the next bearish price action rejection following the next touch of 1.3151.
- 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 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 I thought everything would now depend upon whether the price could get established above 1.3200 (a more bullish sign) or below 1.3150 (a more bearish sign). I was ready to take a bullish bias if we got 2 consecutive closes above 1.3200 later during the London session or the first half of the New York session.
This was a relatively good call, at least in identifying the pivotal point for the day, which was just below 1.3200 at about 1.3190. The price has sold off quite strongly from that high and is now back in its range and looking much less bullish. The Canadian Dollar has strengthened considerably over the past few hours, breaking below a formerly supportive area and appearing to print new lower resistance levels. The level confluent with 1.3150 could be very attractive as a short trade entry opportunity if we get a bullish retracement to it followed by a bearish failure: I would take a bearish bias later if this scenario sets up.
It would be wise to be extremely careful about trading this currency pair today, as there are very major releases due for both currencies in this Forex pair.
Concerning the CAD, there will be a release of GDP data at 1:30pm London time. Regarding the USD, there will be a release of ADP Non-Farm Employment Change data at 1:15pm, followed by the FOMC Statement and Federal Funds Rate at 7pm and the FOMC Press Conference half an hour after that.