USDCAD: Bears struggling; 1.3113 pivotal point
Yesterday’s signals were not triggered as none of the key levels were ever reached.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades must be taken before 5pm New York time today only.
Long Trade Idea
Long entry after the next bullish price action rejection following the next touch of 1.3054.
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 Trades Ideas
Short entry after the next bearish price action rejection following the next touch of 1.3113 or 1.3153.
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 it was notable that the bulls had not been able to push the price up by enough to even reach the nearest resistance level, let alone get past it. I was therefore inclined to take a bearish bias here until the support level of 1.3054 is reached, provided that the price remains below 1.3153.
This has not worked out so well and I think the bears will be in trouble if the price can get established today above 1.3113. There is a long-term bearish trend, but we are not getting any follow-though. If there is no increase in tension in the Gulf, I think the price is not likely to move down, but it doesn’t look so great on the bullish side either. Therefore, it may be best to stand aside from trading this currency pair for the time being.
There is nothing of high importance due today regarding the CAD. Concerning the USD, there will be a release of the ADP Non-Farm Employment Change forecast at 1:15pm London time followed at 3pm by ISM Non-Manufacturing PMI data.