Yesterday’s signals could have produced a long trade entry following the break of the very large bullish pin candlestick which rejected the support level at 1.3119. This would still be in profit at the time of writing but looks as if it should be closed out right away.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades must be taken before 5pm New York time, during the next 24-hour period.
Long Trades
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Go long after the next bullish price action rejection following the next entry into the support zone between 1.3180 and 1.3175, or at a bullish bounce upon a touch of 1.3100.
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Place the stop loss 1 pip below the local swing low.
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Move the stop loss to break even once the trade is 20 pips in profit.
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Take off 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
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Go short after the next strongly bearish price action rejection following the next touch of 1.3275.
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Place the stop loss 1 pip above the local swing high.
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Move the stop loss to break even once the trade is 20 pips in profit.
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Take off 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 major news coming in a few hours from the Bank of Canada, there was likely to be a big spike in volatility and this might push the price anywhere. This was hardly a difficult call to make, but it was correct, with the price spiking down to 1.3100 before rising strongly and sharply, giving some follow-though bullish momentum for a few hours. However, we are now seeing a classic bearish “U” formation just under 1.3220 which looks likely to move the price further down over the short term. The key test here now will be whether 1.3175 holds. The Bank of Canada raised rates by 0.25%, but as can be seen, this was expected and has had little impact so far. I have a weakly bullish bias on this pair today provided the price can remain above 1.3175.
There is nothing due today concerning the CAD. Regarding the USD, there will be a release of CPI data at 1:30pm London time.
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