Potential shorting opportunity on the USD/CAD

FX:USDCAD   U.S. Dollar / Canadian Dollar
189 0
Weekly Timeframe: The weekly timeframe currently shows that price is stalling, with no real decision being made by either the buyers or sellers yet, as price is currently dancing just below a major weekly supply area coming in at 1.18061-1.14739.

Daily Timeframe: The daily timeframe represents what we believe to be a nice-looking three-drive pattern – 1st drive is seen at 1.12696, second at 1.13842, and finally the third being the reaction seen at the aforementioned weekly supply area at 1.14655. For further a sell off to be seen, a stacked area of daily demand will need to be consumed beforehand (1.11211-1.11813/1.11896-1.12416). It will be interesting to see what the 4hr timeframe shows.

4hr Timeframe: A potential short trade may be setting up on the Loonie at the moment. Notice how price recently consumed a 4hr decision-point demand area seen at 1.13243-1.13413, this was our cue to begin looking for sells down to at least 1.13, and given enough time, the 1.12382 level (located around the first area of stacked daily demand at 1.11896-1.12416).

So, where are we looking to enter short? We really like the 4hr fakeout area above at 1.14474-1.14290, since pro money will likely see this as a perfect area to fake into past the 114 round-number level. One can only imagine how many buy stops are/were located just above this psychological number – perfect for pro money to sell into!

Reasons for shorting with a pending sell order at 1.14266:

1. Trading around the base of a major weekly supply area at 1.18061-1.14739.
2. Three-drive approaching pattern spotted on the daily timeframe .
3. Nice fakeout zone at 1.14474-1.14290 that sits just above 1.14.

Buy/sell levels:

• Buy orders: Flat (Predicative stop-loss orders seen at: N/A).

• Sell orders: 1.14266 (Predicative stop-loss orders seen at: 1.14603).

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