USDCAD: Support at 1.3054 holds firmly again
Yesterday’s signals were not triggered, as the bearish price action unfortunately took place a couple of pips above the resistance level of 1.3113. However, this resistance level was quite accurate as a marker for a major bearish turn.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades may only be entered before 5pm London time today.
Long Trade Idea
Go long after the next bullish price action rejection following the next touch of 1.3054.
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 Ideas
Go short after the next bearish price action rejection following the next touch of 1.3086 or 1.3115.
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 if there were no increase in tension in the Gulf, the price was not likely to move down, but it didn’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.
I was completely wrong, the bearish trend reasserted itself and the price made a new long-term bearish breakout again yesterday, as defined by the lowest daily closing price which had been made over several weeks. However, the key support level at 1.3054 has held up quite firmly. There is a long-term bearish trend and as such, I would take a bearish bias at any bearish reversals at a resistance level, most notably 1.3086. This may well not happen today as trading volume is likely to be very thin by the second half of today’s London session due to the public holiday in the U.S.A.
There is nothing of high importance due today regarding the CAD or the USD. It is a public holiday in the U.S.A.