USDCAD: Bullish reversal possible from 1.3045
Yesterday’s signals produced a profitable long trade entry from the doji on the H1 price chart which rejected the support level identified at 1.3045. It may be wise to take at least partial profit to remove risk as the price has made a short-term bearish turn and now faces key data releases concerning both currencies.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades must be taken before 8am London time and 5pm New York time today.
Long Trade Ideas
Go long after the next bullish price action rejection following the next touch of 1.3045 or 1.2962.
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
Go short after the next bearish price action rejection following the next touch of 1.3120 or 1.3177.
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 I was ready to take a bullish bias if we had gotten a bullish reversal at 1.3045. This was a good call as we did get a bullish reversal there which produced a profitable long trade.
It is impossible to make any directional call today as we have major central bank input for both the CAD and the USD which could push the price anywhere and is highly likely to produce high volatility. As such, the best approach today after either batch of releases will probably be to fade any sudden spikes to extreme support or resistance levels, ideally 1.2962 or 1.3177.
Regarding the USD, there will be releases of ADP Non-Farm Employment Change data at 12:15pm London time, followed by Advance GDP at 12:30pm, and the FOMC Statement / Federal Funds Rate at 6pm then the usual press conference half an hour later. Concerning the CAD, there will be a release of the Bank of Canada’s Monetary Policy Report, Rate Statement, and Overnight Rate at 2pm, followed by a press conference at 3:15pm.