USD/CAD Forex Signal

Adam Lemon DailyForex.com

Yesterday’s signals produced a nicely profitable long trade from the bullish engulfing candlestick which rejected the support level at 1.3000, offering a logical take profit on the spike to the nearest resistance level at 1.3085 during the Asian session.

Today’s USD/CAD Signals

Risk 0.75% per trade.

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

Long Trade

Go long after the next bullish price action rejection following the next touch of 1.3000.
Place 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.
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 Trades

Go short after the next strongly bearish price action rejection following the next touch of 1.3085 or 1.3136.
Place 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.
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 the resistance level of 1.3085 should be the day’s pivotal level: if it held for a few hours, the price would probably move down towards 1.3000 again, while a sustained break above 1.3085 would be a bullish sign. This is exactly what happened, it was a good call: the level held, the price moved down to 1.3000, where there was a very predictable and strong bullish bounce providing a nicely profitable long trade entry.

Both the nearest key levels have held and there is no change to the technical picture. I would want to see the price get out of the 1.3000 to 1.3085 range before entering any more trades.

Concerning the CAD, there will be a release of GDP data at 1:30pm London time. Regarding the USD, there will be a release of CB Consumer Confidence data at 3pm.

Author

Adam Lemon

DailyForex.com

Adam is a Forex trader who has worked within financial markets for over 12 years, including 6 years with Merrill Lynch. He is certified in Fund Management and Investment Management by the U.K. Chartered Institute for Securities & Investment.

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