USDCAD: Very pivotal point at 1.3164
Yesterday’s signals produced a long trade from the bullish hourly candlestick which rejected the support level identified at 1.3120. This trade made nearly 20 pips of profit and is now back at break even. The direction of the price looks uncertain as it is consolidating within a narrow range, so it may be wise to exit this trade without a loss if possible.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades may be entered before 5pm New York time Thursday only.
Long Trade Ideas
Long entry after the next bullish price action rejection following the next touch of 1.3120 or 1.3104.
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 Trade Ideas
Short entry after the next bearish price action rejection following the next touch of 1.3153 or 1.3164.
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 we had a significant bullish breakout above 1.3120, but it had not yet managed to break above 1.3164. I again look to this level to be pivotal and would be more bullish above it if the price can get there, but for now, a potential long trade at 1.3120 or 1.3104 is what I was watching out for.
This was an OK call as the support at 1.3120 has held, but the resistance at 1.3153 above has also held. This means the technical picture has changed little: it still makes sense to be much more bullish if the price can break out above 1.3164 and old up there. Alternatively, a sustained breakdown below 1.3100 would be a bearish sign that the original breakout had probably failed, and the price would be right back within its long-term consolidative range.
I would take a bullish bias later if we get two consecutive hourly closes above 1.3164.
There is nothing of high importance due today regarding the CAD. Concerning the USD, there will be a release of Core Durable Goods Orders at 1:30pm London time.