USDCAD: Consolidation between 1.3251 and 1.3301
Last Thursday’s signals were not triggered, as there was insufficiently bullish price action at 1.3271 when that price was first reached that day.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades may only be taken before 5pm New York time today.
Long Trade Ideas
⦁ Go long after the next bullish price action rejection following the next touch of 1.3251 or 1.3202.
⦁ 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 1.3301, 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 last Thursday that I would take a bullish bias over the short-term as long as the price holds up above 1.3271, but a bearish reversal at 1.3345 or higher should be taken very seriously as that could produce a medium-term bearish reversal which could be nicely profitable if traded short.
This did not work out so well as the price fell but I was correct to see the level at 1.3271 as pivotal.
The price now is evenly balanced between bulls and bears, with support at 1.3251 and resistance at 1.3301. On this quiet Monday in the absence of any major scheduled news releases, these levels are likely to hold.
Scalps off reversal bounces at either level, in favour of the reversal, will probably be the best approach for trading this currency pair today.
There is nothing of high importance due today concerning either the CAD or the USD.