ICmarkets
Short

Something to watch for on the USD/CAD this week guys...

FX:USDCAD   U.S. Dollar/Canadian Dollar
192 0 7
Weekly gain/loss: - 42 pips
Weekly closing price: 1.3165

Weekly view: Things are not looking too bright for any sellers positioned within the supply zone fixed at 1.3295-1.3017 right now. Although the bears do still have a hand in this fight, offers slowly appear to be diminishing. However, it won’t be until we see a decisive close beyond the resistance level located directly above this zone at 1.3381, will we feel the buyers really have a good handle on things here.

Daily view: Looking at the daily chart , the pair found a pocket of bids around a minor level of support registered at 1.3029 towards the end of last week. Other than minor supply seen at 1.3248-1.3201, we don’t see anything stopping the pair advancing up to supply seen at 1.3405-1.3259. Also worthy of consideration here is the daily convergence point located within this barrier: a 38.2% Fib resistance level at 1.3315 (green line), the weekly resistance level at 1.3381, a channel resistance taken from the high 1.3241 and an AB=CD completion point around the 1.3376ish range.

H4 view: The Canadian dollar             came under pressure on Friday, following a string of lower than expected data. This propelled the US dollar             to highs of 1.3181 by the day’s end, leaving the upside looking favorable towards the 1.32 handle, followed closely by the Quasimodo resistance level at 1.3244.

Direction for the week: In light of the recent reaction seen from within the current weekly supply, and daily action showing a reasonably clear path north this week, further upside may be on the cards, at least until prices crosses paths with the above said daily supply.

Direction for today: Well, we believe 1.32 is likely to get tagged early on in today’s sessions. Be that as it may, the H4 Quasimodo level seen above it at 1.3244 was clearly the more attractive barrier over the past week or so, therefore, we’re expecting price to eventually squeeze shorts from 1.32 and go on to attack the Quasimodo.

Our suggestions: Despite how well price responded to the above said H4 Quasimodo level recently, however, our team is not really looking to sell from here, since there is a good chance of price faking above this level to tag in offers around the daily supply area mentioned above at 1.3405-1.3259. With that being said, If price reaches the 1.3310/15 region within the current daily area we’d have no hesitation (apart from if high-impacting news is scheduled for release) in shorting here at market with stops placed above the daily supply zone at 1.3407.

On the data front today guys, we have the BoC             Gov             . Poloz speaking later on at 11.10pm GMT, which is likely to stir things up in this market. As such, you may want to hold fire on any technical setups you see during this time.

Levels to watch/live orders
• Buys: Flat (Stop loss: N/A).
• Sells: 1.3310/15 region - potential area to look for shorts at market (Stop loss: 1.3407).
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