USD/CAD: Technical outlook and review.

FX:USDCAD   U.S. Dollar / Canadian Dollar
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Weekly Timeframe: An important weekly supply area at 1.10522-1.09996 was recently consumed, no doubt taking out any traders attempting to fade this area in the process. Price is now very close to a weekly Quasimodo resistance level at 1.11252, which should in all likelihood see a nice bearish reaction when/if prices reach this far.

Daily Timeframe: The close above weekly supply (levels above) caused the daily supply area at 1.10522-1.10133 to be consumed as well (which was at the time located deep within the weekly supply area mentioned above). We can openly see this push higher has potentially cleared the path north up to two prominent daily Quasimodo resistance levels (1.12231/1.11910), which are positioned a lot higher than the Quasimodo resistance level seen on the weekly timeframe (1.11252). With that being said, we have to be prepared for the possibility that pro money may not have accumulated enough liquidity (in this case sell orders to buy into) to push prices higher just yet. An obvious area where pro money may sell prices to would likely be to around a daily decision-point area at 1.09327-1.09825; this area could provide a nice launching pad to rocket prices higher to around the aforementioned daily Quasimodo resistance levels.

4hr Timeframe: It was reported in the last analysis, that assuming selling interest came into the market around the 4hr supply area at 1.11033-1.10872, a decline in value would then likely be seen down to around the 1.1 level. A drop in price was indeed seen, but we did not expect there to be as many active buy orders left around the minor 4hr demand area at 1.10276-1.10435, since the spike/tail marked with a blue arrow at 1.10298 seemed (at the time) to have done a good job in consuming any unfilled buy orders before rallying higher towards the aforementioned 4hr supply area, clearly we were wrong here. Nevertheless, the weak test currently being seen could very well encourage follow-through selling down to at least the huge psychological number 1.1, a price action confirmation buy level has been set just above here at 1.10038, the reasoning behind waiting for confirmation here, is simply because deep tests/spikes occur very frequently around round-number levels such as these.

Pending orders/Price action confirmation levels:

• Areas to watch for buy orders: Pending orders: 1.09545 (Stop loss: 1.09277 Take profit level(s): Dependent on how price approaches. Price action confirmation levels: 1.10038 (Stop loss: Dependent on price action after the level has been confirmed, Take profit level(s): Dependent on approaching price action after the level has been confirmed).

• Areas to watch for sell orders: Pending orders: 1.11356 (Stop loss: 1.11746 Take profit levels(s): Dependent on how price approaches). Price action confirmation levels: No Price action confirmation sell levels are seen in the current market environment.

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