USD/CAD Forex Signal

Last Thursday’s signals were not triggered, as none of the key levels were reached that day.

Today’s USD/CAD Signals

Risk 0.75% per trade.

Trades must be entered before 5pm New York time today.

Short Trades

• Go short after the next strongly bearish price action rejection following the next touch of 1.3089 or 1.3118.

• Put 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.

• Remove 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to run.

Long Trades

• Go long after the next strongly bullish price action rejection following the next touch of 1.3003 or 1.2952.

• Put 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.

• Remove 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 last Thursday that if this (bearish) market sentiment persists and stock markets continue to plunge, we are likely to see continuing weakness in the Canadian Dollar. There is no long-term trend in this pair to exploit. Technically, the best analysis that could be made was that if the price remained firmly above 1.3000 for a while, it would probably continue to rise.

Stock markets stabilized somewhat on Friday, and so has the action here, which is consolidating above 1.3000, so that was not a bad call.

I think what will happen next here will depend mostly upon how the U.S. stock market does later today. Further falls should send the price higher. A sustained break below 1.3000 would be a bearish sign and be technically significant.

Regarding the USD, there will be a release of Retail Sales data at 1:30pm London time. Concerning the CAD, the BOC Business Outlook Survey will be released at 3:30pm.