ICmarkets

USD/CAD Technical outlook and review.

FX:USDCAD   U.S. Dollar/Canadian Dollar
42 0 1
4hr TF.

The higher-timeframe picture resembles the following:

• Weekly TF: A big close above the monster weekly supply area at 1.09592-1.08133 has recently been seen, likely clearing the path north towards weekly supply at 1.10522-1.09996.
• Daily TF: Buyers and sellers on this timeframe have been having a mini tug of war around daily supply at 1.09592-1.09156. Price was pushed north, then south, then once again north, when will this end? The path north up to daily supply at 1.10522-1.10133 appears to be relatively free of any major obstacles, so we shall be watching for a push north this week sometime, as this area is also neatly located around a small weekly supply area at 1.10522-1.09996.

The market opened at 1.09693 with the buyers showing very little interest as the sellers are currently seen pushing price south. Taking a look above at both higher-timeframe pictures, we can clearly see we are edging ever so closer to supply areas on both timeframes. With this in mind, we have our eye on a very attractive 4hr supply area at 1.10388-1.10163; there are two reasons why we find this area nice looking:

1. Located in both weekly supply at 1.10522-1.09996, and also daily supply at 1.10522-1.10133.
2. Look just below the aforementioned 4hr supply area, what do you see? A huge round number 1.1, pro money know there will lots of orders around this level, so a push above towards the 4hr supply level, will no doubt stop out the traders trying to fade the big number, and also trigger the breakout buyers’ orders. So pro money will have plenty of buy orders to sell into, who wins? Pro money does, and we being the minority in terms of funding are left stopped out scratching our heads!

However, before the above happens, we have to expect the possibility of a drop south towards 4hr demand at 1.09032-1.09104, the reason being is simple, pro money will require liquidity if they intend to push price above the aforementioned round number (liquidly in this case means buy orders to sell into). If pro money continues to sell hard, traders will follow and enter sell orders into the market, which pro money will gladly accept and buy into. The 4hr demand area below is only a guesstimate, they may even have enough liquidity now for the push up, so be on the lookout for this.

Pending/P.A confirmation orders:

• The pending buy order (Green line) set just above 4hr demand (1.09032-1.09104) at 1.09136 is now active. Our first take-profit level has been hit at 1.09686, so do keep an eye on our second take-profit level at the round number 1.1.
• No P.A confirmation buy orders (Red line) are seen in the current market environment.

• Pending sell orders (Green line) are seen just below 4hr supply (1.10388-1.10163) at 1.10133. A pending sell order has been set here simply because we expect the round number below at 1.1 to be faked above towards this area, hence a first touch reaction is expected since pro money will likely be selling to all those fader traders with their stops just above the round number, and this could very well push prices higher above the round number level right into the aforementioned 4hr supply area.
• No P.A confirmation sell orders (Red line) are seen in the current market environment.

• Areas to watch for buy orders: P.O: 1.09136 (Active) (SL: 1.08951 TP: 1.09686 1.1 1.10163). P.A.C: No P.A confirmation buy orders seen within the current market environment.

• Areas to watch for sell orders: P.O: 1.10113 (SL: 1.10411 TP: Dependent on how price approaches) P.A.C: No P.A confirmation sell orders seen within the current market environment.

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