USDCAD: Consolidation between 1.3236 and 1.3308 persists
Yesterday’s signals produced a profitable long trade from the bullish bounce at the support level identified at 1.3236. It would probably be a good idea to take any remaining risk off the trade but to let at least a small part of it to run as we have a weak long-term bullish trend.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades must be taken prior to 5pm New York time today.
Long Trade Ideas
- Long entry after the next bullish price action rejection following the next touch of 1.3236 or 1.3177.
- 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 Ideas
- Short entry after the next bearish price action rejection following the next touch of 1.3308, 1.3345, or 1.3359.
- 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 the dominant technical feature was a slightly bullish consolidation. I saw the day’s pivotal point as quite likely to be 1.3236 and I was ready to take a bullish bias following a bounce there. We got this bounce and the price rose, so it was a good call.
The technical picture is mostly unchanged, but we may have new lower resistance within the consolidation range at about 1.3270. A couple of hourly closes above that level will suggest a continuation of the short-term bullish movement. Conversely, if the price gets established by the end of the day below the key support at 1.3236, that would be a bearish sign.
There is nothing of high importance due today concerning the CAD. Regarding the USD, there will be a release of Crude Oil Inventories data at 3:30pm London time.