Yesterday’s signals produced a profitable short trade from the bearish doji candlestick on the hourly chart which rejected the resistance level I identified at 1.3332.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades must be taken between 8am London time and 5pm New York time on Tuesday.
Long Trades
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Long entry after the next bullish price action rejection following the next touch of 1.3300 or 1.3241.
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Put 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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Remove 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to run.
Short Trades
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Short entry after the next bearish price action rejection following the next touch of 1.3367 or 1.3422.
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Put 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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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 yesterday that the strong bullish move had faltered at the round number of 1.3300 and looked to be beginning a bearish retracement. I thought 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 was no long-term trend in this currency pair, there may be some residual bullish momentum left from last Friday’s strong directional move.
I was right about the momentum but wrong about the retracement, as the price essentially just continued to rise, despite being held for a few hours by the resistance level at 1.3332. The price is now trading above that level and looks bullish as it gets very close to making a new 20-day high price. If the price can remain above 1.3332 for the first couple of hours of the London session, that would be a bullish sign that the price would be likely to go on and reach the resistance at 1.3367, but I doubt it would be able to get any higher than that today.
There is nothing of high importance due today concerning either the CAD or the USD.
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