USD/CAD Forex Signal

USDCAD: Weaker within a month-long price range

Last Thursday’s signals were not triggered, as none of the key levels were ever reached.

Today’s USD/CAD Signals

Risk 0.75% per trade.

Trades must be taken from 8am London time to 5pm New York time today only.

Long Trade

• Long entry after the next bullish price action rejection following the next touch of 1.3359.

• 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

• Short entry after the next bearish price action rejection following the next touch of 1.3468 or 1.3529.

• 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 after the failed bearish breakout, the price range survived, and we were right back where we were a couple of days before – with the price stuck in a long-term range and refusing to break out, so again, looking for reversals at the extremes of the price chart shown below I thought was likely to be the best strategy for trading this currency pair.

In a way this was a pretty good call, as the price went up to the psychological level at 1.3500 again before rejecting it and falling bearishly, so we see again the survival of this range which has held for more than one month.

The technical position is the same over the long and medium-term, but the short-term action is interesting as we see two new resistance levels having formed near the current price, which is currently sitting on potential new support. I am wary of both of the nearest levels, however.

There could be some interesting action on this pair, as the recovery in risk sentiment may boost Crude Oil against the Dollar which could push the price of the Canadian Dollar up by proxy. With Canada open later today while other crucial markets are shut, this pair might well be the one to watch today, with scope for more downside, so I would be prepared to take a bearish bias if we get a strong bearish rejection from 1.3468 later.There is nothing of high importance due today concerning either the CAD or the USD. It is a public holiday today in the U.S.A.