Daily Timeframe: It was mentioned in Friday’s analysis that if price were to break above the daily supply area at 1.13681-1.13024, then the market would likely trade back up to the aforementioned weekly supply area. In our opinion, one of the reasons why price could rally like this was simply because there was consumed supply to the far left marked by a pink downtrend line. A break above 1.14655 would likely attract further buying up towards a major daily supply area seen at 1.17225-1.15458 (located deep within the weekly supply area mentioned above).
4hr Timeframe: The U.S Dollar made significant gains against the Canadian Dollar on Friday, as price rallied over 100 pips. This move absolutely obliterated two 4hr supply areas (1.13681-1.13498/1.14007-1.13844), and only showed signs of slowing down at a 4hr supply area coming in at 1.14474-1.14290 (located below the aforementioned weekly supply area) just before the market closed.
In our view, price can do either one of two things:
1. The sellers can close price below 1.14000, which will likely clear the path south down towards a very important 4hr decision-point demand area seen at 1.13243-1.13413. Assuming that a close below is indeed seen, this will be our cue to begin watching price action for a possible retest opportunity of 1.14000 as resistance, targeting 1.13454 (as per the blue arrows). The reason why we believe this area to be important is simply because this is likely where pro money made the decision to break above the daily supply area at 1.13681-1.13024.
2. A small decline in value could be seen down toward 1.14000, where buying interest will likely be seen. This could force the market to push above the aforementioned 4hr supply area, where at which point our team would begin looking for long opportunities with an overall long-term take-profit target set around the daily supply area mentioned above at 1.17225-1.15458. However, do bear in mind that price would at that point be trading deep within a weekly supply area (see above), so any trades taken long would need strict trade management rules.
• Buy orders: Flat (Predicative stop-loss orders seen at: N/A).
• Sell orders: Flat (Predicative stop-loss orders seen at: N/A).