USD/CAD Forex Signal

Yesterday’s signals were not triggered, as there was no bearish price action at either 1.3357 or 1.3391.

Today’s USD/CAD Signals

Risk 0.75% per trade.

Trades may only be entered before 5pm New York time on Wednesday.

Long Trade

• Go long after the next bullish price action rejection following the next touch of 1.3332.

• 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 Trade

• Go short after the next bearish price action rejection following the next touch of 1.3389.

• 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 yesterday that a break below 1.3391 could spark a bigger downwards movement, but there is a lot of support so it might reverse quickly and unexpectedly. I thought that 1.3391 was likely to be today’s pivotal level. This was a good call, as the price did break below there and fall by another 40 pips over the course of the day.

Although the Canadian Dollar has been one of the weakest currencies lately, that has changed over the past few days as the price of Crude Oil heads upwards again and looks like retesting the key psychological level of $57.50 per barrel.

The price chart below shows a strong and clear short-term bearish trend line holding the price down. If the price breaks above it strongly, that would be a bullish sign, and the price would be likely to go on to retest the recent highs under 1.3500. If this is accompanied by a sharp fall in Crude Oil, it would look like an even stronger trade, so I think that this is the potential opportunity to watch out for here.

There is nothing of high importance due today concerning the CAD. Regarding the USD, there will be releases of Core Durable Goods Orders and PPI data at 12:30pm London time.