USDCAD: Bearish at pivotal 1.3000 area
Last Thursday’s signals were not triggered, as the bullish price action took place a little way below the support level identified at 1.3050.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades must be taken prior to 5pm New York time today only.
Long Trade Idea
Long entry after the next bullish price action rejection following the next touch of 1.2962.
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
Short entry after the next bearish price action rejection following the next touch of 1.3059.
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 last Thursday that a sustained break below 1.3050 or 1.3000 (the latter would be even better) would be a significant, long-term bearish breakdown signal in line with the long-term trend. I would take a bearish bias if the price starts breaking down and holding below 1.3050 during the New York session on above-average volatility.
This was a good call as the New York session actually saw a weak bullish reversal, so it was enough to stay out of trouble as the price rose back out of the 1.3000 to 1.3050 zone.
The price is now looking heavy again, although it has not broken 1.3000 yet. It looks as if we will see a reasonably strong downwards movement which may break much further, either today or tomorrow, so I am taking a bearish bias on this currency pair today as it threatens to reach new multi-month low prices.
There is nothing of high importance due today regarding either the CAD or the USD.