ICmarkets

USD/CAD: Technical outlook and review.

FX:USDCAD   U.S. Dollar/Canadian Dollar
31 0 2
4hr TF.

The higher-timeframe picture resembles the following:

Weekly TF: Prices are stalling after hitting the awesome-looking weekly supply area at 1.10522-1.09996. Considering just the weekly timeframe for the moment, we still believe lower prices could be seen, since there’s very little stopping the sellers from challenging the weekly demand area below at 1.05715-1.07008.

Daily TF: A stunning to-the-pip reaction has been seen off of the daily supply area at 1.09967-1.09401. Taking into account where price is located on the weekly timeframe (see above), we very much expect prices to drop from here back down to at least the daily S/R flip level at 1.08277.
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The 4hr timeframe shows that selling pressure dried up when the market tested the 4hr demand area at 1.08553-1.08681, which in turn saw a beautiful to-the-pip bullish reaction, triggering our P.A confirmation buy level located just above at 1.08715. The subsequent rebound rally produced a potential bullish close, but the only way to find out if the buying was legit, and not just traders covering their short positions, will be to see a close above the round number 0.9. This would give us the confidence to allocate a pending buy order in place of the P.A confirmation buy level.

Taking all of the above into consideration, current price is trading around impressive higher-timeframe supply areas (Weekly: 1.10522-1.09996, Daily: 1.09967-1.09401) at the moment, so expecting a huge rally higher at the moment may be a little too ambitious for the time being.

Pending/P.A confirmation levels:

• No pending buy orders (Green line) are seen in the current market environment.
• The P.A confirmation buy level (Red line) set just above 4hr demand (1.08553-1.08681) at 1.08715 is now active. For this area to be confirmed the buyers must close price above the round number 0.9, only then will we consider setting a pending buy order in the market.

• Pending sell orders (Green line) are seen just below a 4hr supply area (1.10388-1.10163) at 1.10127. This area remains fresh, and likely contains unfilled sell orders indicating a bounce south at the very least will be seen if/when price reaches this area.
• P.A confirmation sell levels (Red line) are seen just below 4hr supply (1.09967-1.09807) at 1.09777. The reasoning behind not setting a pending sell order here was simply because price could rally all the way back up to (in our opinion) a beautifully located 4hr supply area at 1.10388-1.10163.

• Areas to watch for buy orders: P.O: No pending buy orders are seen in the current market environment. P.A.C: 1.08715 (Active-awaiting confirmation) (SL: Dependent on price action after the level has been confirmed TP: Dependent on approaching price action after the level has been confirmed).

• Areas to watch for sell orders: P.O: 1.10127 (SL: 1.10440 TP: Dependent on how price approaches) P.A.C: 1.09777 (SL: Dependent on price action after the level has been confirmed TP: Dependent on approaching price action after the level has been confirmed).
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