ICmarkets
Long

Long taken at the base of AB=CD – looking for at least 1.3100

FX:USDCAD   U.S. Dollar/Canadian Dollar
232 0 2
Weekly view: The Canadian dollar             gained close to 100 pips against the Greenback last week. This sell-off began from the underside of supply at 1.3456-1.3277, consequently printing a bearish selling tail in the process and finishing the week off on its lows at 1.3071. Should the sellers remain dominant this week, we might see further shorts come into this market and push prices back down to the swap support barrier at 1.2833.

Weekly levels to watch this week fall in at: 1.3456-1.3277/1.2833.

Daily view: From this angle, we can see that the USD/CAD             ended the week kissing the top-side of a swap demand base drawn from 1.3074-1.3025. Whether or not this area will hold is difficult to judge since let’s not forget that there is currently room for weekly action to continue driving lower (see above). In the event buyers do defend this zone this week, however, we’ll be looking at Wednesday’s high 1.3279, followed closely by the Quasimodo resistance 1.3352. On the other side of the coin, a break below this barrier could indicate that this market is ready to decline further down into the hands of a Quasimodo area seen at 1.2859-1.2915. It will be interesting to see what the 4hr timeframe has to say on the matter…

Daily levels to watch this week fall in at: 1.3074-1.3025/1.3279/ 1.3352/ 1.2859-1.2915.

4hr view: Going into the early hours of Friday’s American session, price aggressively sold off from highs of 1.3192. Consequent to this, bids were taken out at psychological support 1.3100, and price jabbed deep into demand at 1.3038-1.3082. Not only does this demand area converge nicely with the 50.0% Fibonacci level at 1.3057, but it also lines up beautifully with an AB=CD bottom coming in around 1.3057 as well.

It is a good job this morning’s open was stable at 1.3074, as we entered into a small long position at 1.3059 on Friday (area was noted to watch for longs in Friday’s report). Granted, we know we have potentially bought into weekly flow (see weekly section above), but with price trading around a swap demand base on the daily timeframe at 1.3074-1.3025, we felt relatively confident that price will at least reach our first take-profit target at 1.3100 today.

Levels to watch/ live orders:

• Buys: 1.3059 LIVE (Stop loss: 1.3031).
• Sells: Flat (stop loss: N/A).

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