USD/CAD Forex Signal

Last Thursday’s signals produced both a profitable long trade from the bullish rejection of 1.3159 and a profitable short trade from the bearish rejection of 1.3204, although both gave little more than the minimum 20 pips of profit.

Today’s USD/CAD Signals

Risk 0.75% per trade.

Trades may only be entered until 5pm New York time Monday.

Long Trades

  • Go long after the next bullish price action rejection following the next touch of 1.3241 or 1.3204.

  • Place 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.

  • 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 bearish price action rejection following the next touch of 1.3332 or 1.3367.

  • Place 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.

  • 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 last Thursday that there was still something of a bearish trend with the price held down by a bearish trend line, but it was no longer a channel and there was a double bottom at about 1.3120. The resistance at 1.3204 was looking attractive as we had there a confluence of a flipped horizontal level, the surviving bearish trend line, and the round number at 1.3200 – I was ready to take a bearish bias if we get a bearish rejection there later.

This was a good call, and the levels were correct, but the next day the price shot up and made a very strong bullish move which changes the technical situation. This move has faltered at the round number of 1.3300 and looks to be beginning a bearish retracement. I think it would be worth taking a bullish bias if we see a firm bullish reversal at about 1.3241 after New York opens, as although there is no long-term trend in this currency pair, there may be some residual bullish momentum left from last Friday’s strong directional move.

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There is nothing of high importance due today concerning either the CAD or the USD.