USDCAD: Bulls winning over short-term
Yesterday’s signals were not triggered, as the bearish price action took place above the resistance level identified at 1.3192.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades may only be taken prior to 5pm New York time today.
Long Trade Ideas
Go long 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
Go short after the next bearish price action rejection following the next touch of 1.3247.
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 the picture was still bearish on all time frames, especially the long-term charts. I took a bearish bias for the day below 1.3192. This call did not work out so well, as the price turned around and invalidated the former support level at 1.3192. We also have a first higher low on the shorter-term charts and the price seems to be moving upwards from there. This suggests we are going to see a counter trend move, which might become a deep bullish retracement if the price can get established above the 1.3246 / 1.3250 area.
I have previously noted that there is strong support just above 1.3100 which might hold up the price and this is what seems to be happening.
I am still bearish on this currency pair, technically, over the long-term, it just doesn’t seem ready to happen yet.
I would look for a strong bearish reversal at 1.3246 and then take a bearish bias if it sets up later.
Regarding the USD, there will be a release of CPI (inflation) data at 1:30pm London time. There is nothing of high importance due today concerning the CAD.