USDCAD: Bearish flag pattern weakly broken
Yesterday’s signals were not triggered, as the bearish price action took place just above the resistance level at 1.3189.
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 1.3170, 1.3140, 1.3119, or 1.3100.
⦁ 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 Idea
⦁ Go short after the next bearish price action rejection following the next touch of 1.3240.
⦁ 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 due to the dominant bearish flag marked by the symmetrical trend lines in the price chart, the pivotal points were likely to be either 1.3189 or 1.3100 as both were quite confluent with the current position of these trend lines.
As it turned out, this wasn’t a great call, although the price did struggle to move beyond 1.3189 to any significant amount.
We have a bullish breakout above the flag, but it has been weak so far. Nevertheless, the price is holding up above the broken trend line and may be supported at 1.3170. If the price can hold above that level all day, I will begin to be comfortable in taking a bullish bias. If the price sinks, I see a messy outcome which traders are probably best avoiding.
There is nothing of high importance due today concerning either the USD or the CAD.